Back Matter

Back Matter

Author(s):
International Monetary Fund. Research Dept.
Published Date:
October 1994
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    Annex I European Economic Integration

    Since the mid-1980s, there has been renewed vigor in the process of economic integration in Europe. Initially, efforts were focused on deepening economic ties within the European Union (EU) through the Single Market program.1 Plans for monetary union and for strengthened coordination of macroeconomic policies (economic and monetary union, EMU) also gathered momentum. Spurred by developments within the EU and facilitated by political changes in the former centrally planned economies, the early 1990s have seen a notable widening of the integration process: the European Economic Area (EEA) has extended most aspects of the EU’s internal market to five of the seven countries of the European Free Trade Association (EFTA); four of these countries have agreed on terms for full EU membership, subject to ratification; and the EU and EFTA have strengthened their ties with the transition economies in central and eastern Europe.

    Main Developments

    Until the mid-1980s, market integration within the EU was founded principally on the absence of both tariffs and quantitative restrictions on intra-EU trade and on a common external tariff. These proved inadequate to realize the goal of a common market, owing to national prerogatives in regulating domestic markets and the associated border controls. The unveiling of the internal market program in 1985 signaled a concerted effort to eliminate most physical, technical, and fiscal barriers to market integration by end-1992.

    With the EFTA countries eager to enjoy the benefits of the internal market, negotiations on the EEA commenced in 1990, aiming to build on the existing free trade in industrial products between the EU and EFTA. The agreement was signed in 1992 and, after a delay related to the decision of the Swiss people not to participate, came into effect on January 1, 1994.2 Meanwhile, four EFTA countries—Austria, Finland, Norway, and Sweden—entered into negotiations for full EU membership, which were concluded successfully in March 1994. The goal is that these countries accede to the EU in January 1995. The European Parliament approved the enlargement agreements in May 1994, and the Austrian people endorsed EU membership in a referendum in June. Referendums are planned for the other three countries in October and November of this year. Enlargement will also be subject to approval by national parliaments of the existing EU countries.

    Economic and political reform in the former centrally planned economies of eastern and central Europe has prompted a rapid eastward reorientation. This is being facilitated by improved access to EU and EFTA markets. Most notably, between December 1991 and March 1993, the EU signed association agreements—known as Europe Agreements—with Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.3 These agreements aim to establish a free-trade area, with the notable exception of agriculture, by 2003 and also include provisions dealing with the movement of labor and capital, competition policy, and the adaptation of legislation in key areas to make it more compatible with that prevailing in the EU. The agreements also commit the EU to continue financial assistance in support of reform. Pending ratification, interim accords containing the trade provisions took effect in 1992 for Czechoslovakia, Hungary, and Poland, and in 1993 for Bulgaria and Romania. The EFTA countries have negotiated broadly similar trade arrangements with these countries.

    The EU is liberalizing trade more quickly than the associate countries. Indeed, the schedule for EU liberalization was accelerated unilaterally by the European Council at its June 1993 meeting in Copenhagen, a meeting that also committed the EU to eventual membership for the associate countries.4 Under the interim agreements that took effect in 1992, as amended in Copenhagen, access to EU markets is to be completely liberalized for most industrial products by end-1994, with restrictions on steel products eliminated a year later and those on clothing and textiles by end-1997.5 The agreements, however, provide for only relatively moderate liberalization of agriculture. More generally, the effective degree of liberalization will depend on the extent of recourse to safeguard and antidumping clauses.

    The Impetus for Integration

    Integration within Europe has important political dimensions. During the reconstruction following World War II, strong and mutually advantageous economic ties were seen as critical to promote political harmony. More recently, the political change that has swept through eastern and central Europe and the former Soviet Union has given an important stimulus to the integration process. For western Europe, economic ties with the countries in transition are a means of supporting reform and fostering political stability. Moreover, for countries with a tradition of neutrality, the disappearance of tensions between eastern and western Europe removed an important constraint on their participation in regional arrangements. For the transition countries, stronger links with western Europe offer a means of consolidating reforms. In these considerations, the economic case for regional integration is intertwined with the political one. It is recognized not only that economic benefits provide important support for the political goals, but also that political instability could threaten regional economic performance.

    Political considerations aside, the potential economic benefits alone can be a powerful motivating factor. In assessing the benefits of regional integration, the first step has traditionally been to examine the relative magnitudes of trade creation and trade diversion—the former representing the replacement of domestic production with less costly products of regional trading partners, and the latter the substitution of goods produced by regional trading partners for less costly imports from trading partners outside the region. Trade creation is likely to predominate when the countries forming the regional trading arrangements already do most of their trade with each other or when tariffs facing countries outside the union are relatively low.

    Often, however, these static trade effects may be much less important than more dynamic, internal economic effects, notably on the supply side.6 An important aspect of this is the economies of scale that can accompany market enlargement. Efficiency may also be promoted by harmonizing regulations and competition policy. Moreover, as highlighted by the recent literature on economic growth, static supply-side benefits can be augmented significantly by dynamic effects related to higher investment, quicker technological progress, and faster human capital accumulation.7

    Most assessments of the earlier stages of European integration have concluded that trade creation exceeded trade diversion, facilitated in part by the progress in global liberalization.8 The supply-side effects are also believed to have been important, facilitated by the growth of regional trade relative to output (see chart 27).9 As discussed further below, the focus of current integration efforts on supply-side performance and the relatively low level of tariffs in western Europe suggest that, if these efforts are successful, pure trade effects are likely to be dominated by supply-side effects, both static and dynamic. Moreover, the continued liberalization of world trade in the context of the Uruguay Round agreement should further limit the extent of trade diversion.

    Chart 27.European Union: Trade Integration

    (In percent)

    Source: IMF, Direction of Trade Statistics Yearbook.

    Implications of Integration

    For the EFTA participants, the EEA holds the promise of significant “internal market” benefits in the form of greater market access, reduced costs, more intense competition, increased economies of scale, and induced growth effects. The potential importance of these benefits can be illustrated by the various “ex-ante” estimates of the impact of the EU’s internal market program. The estimates of the European Commission staff—that full market integration would, over time, yield a 4½-6½ percent boost to EU GDP—have been criticized as too optimistic, and some other estimates suggest benefits of less than half this magnitude.10 Even these smaller estimates are significant, however, particularly when it is recalled that formal estimates have tended to consider only static effects. Some studies have emphasized that the dynamic effects, although difficult to quantify, may well be even more important.11

    There has been less quantitative work on the overall effects of the EEA. One study, confined to industry, transportation, and finance, estimates the static benefits for the EFTA countries of full market integration with the EU at 3½ percent of income in these sectors.12 Although the EEA agreement falls somewhat short of full market integration, as discussed below, any assessment of EEA membership needs also to take account of the costs entailed in remaining outside the single market, most notably that EFTA producers would be in a weaker competitive position vis-à-vis EU producers—which the study noted above estimates would cost an additional ½ of 1 percent of the income in the sectors examined—and that investors would be likely to view EFTA locations less favorably.

    The economic costs of EEA participation would, at an aggregate level, seem to be relatively limited. Trade diversion should be small—the EFTA countries already do most of their trade with the EU and, except for agriculture, which is not covered by the EEA, EFTA protection against third countries is relatively low (indeed, lower on average than in the EU). The EFTA members of the EEA will contribute to a fund for the EU’s poorer regions—these contributions will amount to about ⅓ of 1 percent of their GDP in 1995, but they will decline subsequently and cease after 1998.

    The step to full membership will entail greater institutional involvement in the EU, including participation in legislative and regulatory processes and in the Common Agricultural Policy (CAP), adoption of the common commercial policy vis-à-vis third countries, contributions to the EU budget, the adaptation of regional policies to EU rules, and possibly membership in a future monetary union and in common security arrangements. Given the politically sensitive nature of most of these aspects, it is not surprising that EU accession has tended to be a more controversial issue in the applicant countries than was the EEA.

    Set against these considerations is the voice in EU policies that full membership would give. This applies not just in those areas where membership would involve new obligations, but also in the areas covered by the EEA.13 Prospective members will also have influence on environmental issues, where at present they have no say but are affected by EU policies—for example, those on acid rain. While the prospective members are not large—adding 9 percent to the EU’s GDP and 8 percent to its population-—they will have 14 votes of a total of 90 in the Council of Ministers. Thus, on issues where the new applicants have common interests, their votes will account for more than half of the 27 votes needed to block measures that pass on the basis of a qualified majority (which include most measures affecting the internal market).14

    Regarding the specific economic issues associated with membership, debate has tended to focus on the financial transfers to the EU: as relatively affluent countries, the prospective members will be net contributors to the EU. Although the gross transfers of the new members to the EU budget will be a little over 1 percent of GDP, these will be offset in part by payments from the EU for, among others, agriculture and regional development. Some of the more affluent current members make net transfers to the EU of about ½ of 1 percent of GDP. Estimates of the net financial transfer understate the impact on government budgets in the acceding countries, since only part of the receipts from the EU will provide budgetary relief by replacing spending previously funded by national governments. More generally, however, such estimates are misleading, since they do not take account of the economic benefits that EU membership is expected to produce—even in a narrow fiscal context, the additional tax revenue resulting from higher output could, over time, compensate fully for the costs to national budgets of EU membership.15

    Identifying the economic benefits of EU membership for the new members entails difficult judgments about the extent to which the EEA yields the potential benefits of market integration. It is clear that there are important benefits that would be dependent on full membership. Under the EEA, for example, border controls remain; surveys suggest that these controls add up to 3 percent to the costs of goods in trade. Furthermore, EU rules of origin give less favorable treatment to EFTA producers using goods from the associate countries as intermediate inputs than they do to EU producers. It is also expected that enforcement of competition law would be stronger within the EU.16 More generally, as full membership is less reversible than EEA participation, it would give potential investors greater confidence in the future payoff of investments induced by the market integration process.

    Outside the realm of the Single Market program, the key issue is agriculture, which has been more heavily protected in the EFTA countries than in the EU.17 The decline in prices to EU levels will bring sizable gains to consumers and should also entail important improvements in the efficiency of resource allocation. These gains will become even clearer as the implementation of the 1992 CAP reforms is completed. Indeed, there are likely to be pressures for additional CAP reforms, both from within the EU and in international forums, pressures that may well be less intense on small producers outside the EU. As discussed below, such pressures are likely to be reinforced by efforts to integrate further the transition economies with the EU. The size of the benefits of reduced producer subsidies will depend partly on the shift of agricultural manpower to other more productive activities, which will be influenced by the future path of direct income supports for farmers.18 Even without the reallocation of agricultural labor, however, the reform process yields important benefits by reducing distortions facing consumers, by cutting incentives for input-intensive production techniques, and by encouraging a shift of capital to other activities.

    For the countries in transition, it is the reduction in formal trade barriers—tariffs and quantitative restrictions—that is the leading element of the integration process. Although the Europe Agreements contain some elements related to harmonization of regulatory policies and legislative frameworks, these are set in a medium-term context and are relatively limited in scope compared with the EU’s internal market. Nevertheless, as with liberalization in western Europe, it is the supply-side effects that are likely to be crucial: in particular, the prospect of realizing a rapid expansion of trade should provide a major stimulus to investment in the transition economies. Trade has already grown rapidly—exports of the eastern European associate countries to the EU rose by 76 percent (in U.S. dollar terms) between 1989 and 1993, and the share of their trade with the EU rose from one-fourth to one-half. Some recent studies estimate a very large potential for growth in trade between countries in transition and the EU.19

    The fast pace of EU liberalization for most industrial goods is broadly in line with the needs of the transition economies. However, liberalization has been slower in sensitive areas such as steel, clothing, textiles, and agriculture, which are important for the economies in transition.20 For the sensitive industrial products, the issue is not so much tariffs and quantitative restrictions—these are being reduced quickly and will be eliminated over the next few years—but that the potential exercise of antidumping and safeguard clauses will create important uncertainties for investors. There have already been some examples of the exercise of these clauses, notably against steel imports. In the area of agriculture, liberalization will remain relatively modest when the Europe Agreements are fully implemented, reflecting the institutional and budgetary constraints posed by the CAP.

    The evolution of relations among themselves and with other trading partners will have a bearing on the extent to which the transition economies realize the potential benefits from closer economic ties with western European countries. First, it will be important that restrictions on imports from other partners be reduced so as to limit trade diversion as tariffs on imports from the EU decline. Moreover, the relatively restrictive treatment of agriculture in the association agreements with the EU should not deter the transition economies from faster liberalization of agricultural trade among themselves and with other countries. Second, access to neighboring markets is likely to be a prominent factor in investor location decisions. An investor will be more likely to choose a location in a transition economy if this location can easily service other countries in eastern Europe. Thus, efforts to reduce trade barriers among the transition economies themselves should be vigorously pursued.21

    The economic benefits for the existing EU countries from the widening of the integration process will be less impressive than for EFTA countries or the economies in transition, if for no other reason than when smaller economies integrate with larger ones, the smaller ones are likely to see proportionately greater effects. It is important, however, not to put too much emphasis on economic size. First, the cumulative effect of adding small new members can be significant. Moreover, the physical size of the eastern European countries in transition, with a population, at present, of close to one-third that of the EU, suggests that they may be an important economic force over the longer run. Second, the process of integration can affect the dynamics of decision making in the EU. For example, the drive to integrate the countries in transition may be an important force for structural change in western Europe. In particular, it is widely recognized that the budgetary implications of an eastward extension of the CAP in its present form would be unsustainable. Similarly, competitive pressures in certain sectors as a result of greater market access for the industrial goods of the transition economies underline the need for more flexibility in western European labor markets, so as to facilitate the profitable absorption of lower-skilled and displaced workers, as well as the need for more effectively targeted education, training, and income support mechanisms.22

    Finally, producers in other countries will find themselves in a weaker competitive position vis-à-vis producers in the integrating countries. The negative effects, however, are likely to be offset by the benefits of larger European markets. More generally, the European integration process can provide important lessons for the rest of the world—notably, that attacking impediments to trade other than tariffs and quantitative restrictions has the potential to yield significant welfare gains.

    For countries that do not trade heavily with Europe, the effects of the continuing regional integration in Europe are likely, on balance, to be relatively small. For the countries geographically closer to the European integration process, the concerns may be more complex. In particular, to the extent that they lag in their access to western European markets, these countries may have greater difficulty in attracting investment than countries on a faster integration track. This applies also to the countries in transition that have not benefited from as liberal terms as the countries covered by the association agreements with the EU. There is also a group of European economies—Cyprus, Malta, and Turkey—not discussed in this annex that has long-established ties with the EU and that aspires to EU membership. Although these countries have liberal access to EU markets for industrial products,23 they have not had the opportunity to participate in the recent deepening of the integration process among the EU and EFTA countries. The considerations outlined above underline the importance of ongoing EU negotiations with these various groups of countries and, more generally, of the global process of liberalization.

    * * *

    Although the recent widening of the integration process in Europe has important political dimensions, economic considerations have also been important and are likely to be central to its future development. For the EFTA countries, participation in the EU’s internal market promises important static and dynamic efficiency gains, with concomitant benefits to consumers. While the political dimension has made EU accession a somewhat more controversial issue for these countries than membership in the EEA, this further step is expected to yield important net additional benefits by enabling these countries to take full advantage of market integration and by promoting greater efficiency in agriculture. The countries in transition, which are at an earlier stage in the integration process, may expect gains not only from the reductions in formal trade barriers, but also from dynamic supply-side effects following the expansion of trade. The economic benefits of further deepening of their economic ties with the EU, and ultimately of EU membership, are likely to be important factors sustaining the integration process over the coming years. Although the existing EU countries may not gain as substantially as the EFTA countries and the countries in transition, nonetheless significant benefits can be expected over the longer term as the effects of integration cumulate, and as the accompanying pressures for structural change increase. Finally, while producers in other countries may find that their competitive positions weaken relative to European producers, the effects of market expansion in Europe will tend to offset this. For these countries, as well as for the integrating countries themselves, it will be important that European economic integration continue to take place in a wider context of global liberalization.

    Notes

    This Annex was prepared by S.G.B. Henry and Donogh C. McDonald.

    For ease of exposition, EU is used throughout to refer to both the European Union and the European Community (EC).

    A second EFTA country, Liechtenstein, is currently not participating in the EEA. Although its participation was approved in a referendum, changes to the customs union with Switzerland, also subject to a referendum, will be required before participation can begin.

    The agreement with former Czechoslovakia was subsequently replaced by separate agreements with the Czech and Slovak Republics. The EU is negotiating a Europe Agreement with Slovenia and is expected to follow up on the free-trade agreements currently being negotiated with the Baltic countries with an offer of association. The EU has also negotiated or is currently negotiating liberalizing trade agreements with other economies in eastern Europe and the former Soviet Union, although these agreements do not provide for the same degree of market access as the Europe Agreements.

    Hungary and Poland have already formally applied for EU membership.

    For the interim agreements that took effect in 1993, the corresponding dates are generally one year later.

    In addition, as recognized early in the literature on customs unions, regional integration may boost welfare by reducing distortions facing consumers, even with net trade diversion. See, for example, Richard Lipsey, “The Theory of Customs Unions: A General Survey,” Economic Journal (1960).

    Richard Baldwin has emphasized these dynamic effects in “The Growth Effects of 1992,” Economic Policy, Vol. 4 (October 1989), pp. 248—81; and “Measurable Dynamic Gains from Trade,” Journal of Political Economy, Vol. 100 (February 1992), pp. 162–74.

    See, for example, Bela Balassa, “Trade Creation and Diversion in the European Common Market,” in European Economic Integration, edited by Bela Balassa (Amsterdam and New York: North-Holland. 1975); and Alexis Jacquemin and Andre Sapir, “European Integration or World Integration?” Weltwirtschaftliches Archiv, Vol. 124 (No. 1, 1988), pp. 127–39. Much of the trade diversion that occurred can be attributed to the Common Agricultural Policy (CAP).

    This is supported by David T. Coe and Reza Moghadam, “Capital and Trade as Engines of Growth in France: An Application of Johansen’s Cointegration Methodology,” Staff Papers (IMF), Vol. 40 (September 1993), pp. 542–66; and David T. Coe and Thomas Krueger, “Why Is Unemployment So High at Full Capacity? The Persistence of Unemployment, the Natural Rate, and Potential Output in the Federal Republic of Germany.” IMF Working Paper 90/101 (October 1990). These studies estimated that European integration made an important contribution to economic growth in France and Germany, respectively, in the 1970s and 1980s. In particular, they found that the growth of regional trade relative to output was an important determinant of the productivity of labor and capital.

    See Commission of the European Communities, “The Economics of 1992: An Assessment of the Potential Economic Effects of Completing the Internal Market of the European Community,” European Economy, No. 35 (March 1988), pp. 1–222, for the estimates of the Commission staff. A review of the literature can be found in L. Alan Winters, “European Trade and Welfare After ‘1992,’ “CEPR Discussion Paper 678 (London: Centre for Economic Policy Research, June 1992).

    Richard Baldwin, in a less formal quantification, suggested that the internal market program could add from ¼ to 1 percentage point to the annual growth rate in the EU over the longer run. See Baldwin, “Growth Effects of 1992.”

    See Jan Haaland, “Welfare Effects of ‘1992’: A General Equilibrium Assessment for EC and EFTA Countries,” CEPR Discussion Paper 828 (London: Centre for Economic Policy Research, July 1993). Haaland estimated the corresponding gain for the EU countries at 2 percent, most of which was accounted for by integration within the EU itself. The larger relative gains for the EFTA countries reflect the greater scope for economies of scale and increased competition in their smaller economies.

    In the EEA, EFTA countries have no formal say in shaping EU policies, although there is provision for informal consultation. The EFTA countries may reject the extension to the EEA of relevant new EU legislation, but such rejection would entail suspension of the EEA in the area of this legislation.

    Voting arrangements in the EU will be reviewed by an intergovernmental conference in 1996. Countries with larger populations feel that they are underrepresented in EU institutions. Purely on the basis of population, the acceding countries would have only half their prospective voting power, but they, along with other smaller countries, will be able to yield significant influence in any rearrangement of voting weights.

    Moreover, in the short term, the gross transfer to the EU is reduced by transitional arrangements and the absorption by the EU as a whole of the new members’ contributions to the regional fund set up under the EEA.

    The EFTA competition authority has only recently been established.

    In 1992, producer subsidy equivalents, as measured by the OECD, ranged from 49 to 77 percent for the acceding countries, compared with an EU average of 47 percent. On balance, agricultural output in the EFTA countries currently exceeds domestic demand.

    Ongoing agricultural reforms in Europe entail a shift from production supports to direct income supports.

    See Zhen Kun Wang and L. Alan Winters, “The Trading Potential of Eastern Europe,” CEPR Discussion Paper 610 (London: Centre for Economic Policy Research, November 1991). These authors have suggested that if the associate countries were fully integrated in the world economy, their exports to the EU in 1985 would have been many times higher than the actual levels—five times higher for Hungary and Poland, and ten times higher for Czechoslovakia—even at the income levels prevailing in 1985. See also L. Alan Winters, “The Europe Agreements: With a Little Help from Our Friends,” in CEPR, The Association Process: Making It Work—Central Europe and the European Community, CEPR Occasional Paper 11 (London, November 1992); and Richard Baldwin, Towards an Integrated Europe (London: CEPR, 1994).

    In 1992, clothing, textiles, and steel exports ranged from one-fourth of manufactured exports to the EU for Czechoslovakia to almost one-half for Romania. Agricultural goods accounted, on average, for 14 percent of total exports of the transition economies to the EU.

    The so called Visegrad countries—the Czech Republic, the Slovak Republic, Hungary, and Poland—are liberalizing trade among themselves at the same pace as they are liberalizing imports from the EU under the Europe Agreements, with the process to be completed by 2003. As noted above, this is somewhat slower than the pace of liberalization for EU imports from these countries.

    See Chapter III of the May 1994 World Economic Outlook for a discussion of policy priorities in European labor markets.

    Turkey is scheduled to form a long-planned customs union with the EU in 1995, covering all nonagricultural goods.

    Annex II Medium-Term Scenarios for Industrial Countries

    The medium-term scenarios for industrial countries presented in Chapter III are based on simulations using MULTIMOD, the IMF staff’s international macroeconomic simulation model.1 Two scenarios are presented in Chapter III: the first illustrating the downside risks of higher structural unemployment in most countries and of delayed monetary policy reaction to the absorption of cyclical slack, and the second assuming greater fiscal consolidation and the implementation of tax and structural policies to reduce structural unemployment. Each of these scenarios is composed of two separate simulations, and this annex discusses all four individual simulations, describing the technical background, assumptions, and simulation results of the two scenarios presented in Chapter III. In the tables, the results of the two scenarios are presented as deviations from the World Economic Outlook baseline projections, rather than as alternative projection paths as in the main text.

    The “pessimistic” scenario is a combination of hysteresis in labor markets in Europe and Canada and a monetary policy that responds too slowly to the disappearance of slack during the recovery.2 In all countries except the United States and Japan, it is assumed that the natural rate of unemployment gradually rises by 2 percentage points relative to the baseline, which might represent an underassessment of the current level of the natural rate. It is implemented in MULTIMOD as an exogenous increase in the reservation wage, which puts upward pressure on wages and prices.3 The increase in real and nominal wages tends to lower real output, and the increase in the price level lowers the real money stock, raises interest rates, and leads to a small appreciation of the exchange rate. The result is a permanent decline in investment, consumption, and real exports. The spillover effects to the rest of the world are mixed. The increase in prices in all countries except the United States and Japan raises import demand, but this effect tends to be offset by the decline in domestic demand and higher interest rates. The United States and Japan experience small declines in consumption and investment, resulting from the global increase in real interest rates, but their current account balances are essentially unchanged.

    In the monetary simulation, it is assumed that, contrary to the baseline, the monetary authorities in all industrial countries fail to adjust monetary conditions as economic activity recovers and slack is absorbed. As a result, inflationary pressures reignite. In MULTIMOD, this change in policy assumption is implemented by a monetary expansion of 2 percent a year relative to the baseline. For the United States, this begins in 1995, whereas for other industrial countries, where there are still substantial margins of slack, it occurs two years later, in 1997.

    The properties of MULTIMOD allow for “rational” expectations—economic agents are assumed to foresee, among other things, the inflationary impact of an increase in money growth. As a result, they also anticipate that nominal interest rates will rise in the future to incorporate the inflation premium and react by increasing interest rates now. Thus, given the forward-looking nature of expectations, a more expansionary monetary policy would normally tend to raise nominal short-term interest rates on impact. For purposes of this simulation, however, the monetary expansion in the first year is modeled as a onetime increase in the money stock, relative to the baseline, which does not have future inflationary consequences (beyond a onetime increase in the price level relative to the baseline). As a result, nominal short- and long-term interest rates fall relative to the baseline. In the second year of expansion it is assumed that agents realize that the growth rate of the money stock has increased, and the corresponding expectation of higher inflation is therefore built into nominal interest rates. This raises the long-term nominal interest rate above baseline and returns the short-term rate approximately to its baseline value. However, since wages are assumed to be partly sticky, real interest rates are lower than the baseline, resulting in higher output and inflation. The difference in timing of the monetary shock between the United States and the other industrial countries is critical to the evolution of exchange rates: the dollar initially depreciates and then appreciates relative to the baseline assumption.

    Eventually, concern about the sizable increase in the rate of inflation leads the monetary authorities to respond by shifting monetary policy to a disinflationary stance. After two years of monetary expansion relative to the baseline—that is, in 1997 for the United States and in 1999 for other countries—the rate of increase of the money stock is assumed to return to baseline, although the cumulated rise in the level of money balances from the previous two years’ expansion is not reversed. The first year’s decline in money growth is again assumed to be perceived as a onetime decline in the money stock relative to the inflationary trend. That is, the monetary authorities are assumed to lack credibility in the first year of the disinflation program. The decrease in liquidity growth raises short-term rates, reduces output below potential, and begins to slow the rate of inflation. By the second year of the policy correction—in 1998 for the United States and in 2000 for other countries—it is assumed that agents expect (correctly) that the rate of money growth has returned to the baseline and that inflation expectations have also been adjusted down. Because of price stickiness, the contraction drives output below baseline, where it remains for some years.

    The combination of these two simulations, corresponding to the pessimistic alternative in Chapter III, is shown in Table 23.

    Table 23.“Pessimistic” Scenario(Percentage deviation from baseline unless otherwise noted)
    19951996199719981999200020012002
    United States
    Real GDP0.31.21.60.2-0.8-0.6-0.3-0.1
    Unemployment rate1-0.2-0.8-1.4-0.80.10.40.40.3
    Real consumption-0.10.31.81.60.1-0.7-0.8-0.6
    Real investment0.73.22.32.0-3.2-1.6-0.30.5
    GDP deflator0.84.26.96.65.74.84.44.1
    Short-term interest rate1-0.40.11.51.91.71.10.3-0.3
    Long-term interest rate1-0.1-0.91.41.10.5-0.3-0.5
    General government
    balance/GDP10.20.50.5-0.4-0.7-0.40.20.5
    Current account balance/GDP1-0.10.1-0.1-0.4-0.4-0.2-0.1
    Japan
    Real GDP-0.10.10.70.7-0.5-1.1-0.8
    Unemployment rate1-0.1-0.2-0.10.1
    Real consumption-0.2-0.5-0.11.00.5-0.6-0.9
    Real investment-0.2-0.8-0.21.90.6-2.9-3.1-1.1
    GDP deflator0.10.21.15.27.96.65.44.7
    Short-term interest rate10.10.2-0.20.42.02.21.50.5
    Long-term interest rate10.10.21.51.70.60.1-0.4
    Exchange rate ($/¥)1.33.40.7-3.6-1.70.6-0.4-1.4
    General government
    balance/GDP1-0.10.20.3-0.2-0.7-0.40.2
    Current account balance/GDP10.20.30.30.30.20.1
    Germany
    Real GDP-0.6-1.4-1.5-0.7-0.9-2.5-3.2-2.8
    Unemployment rate10.30.71.00.91.01.62.32.6
    Real consumption-0.1-0.8-1.5-1.7-1.1-1.7-2.8-3.1
    Real investment-1.4-3.4-3.0-0.4-1.5-5.4-5.8-4.0
    GDP deflator0.51.12.36.28.77.76.86.2
    Short-term interest rate10.10.40.20.92.32.31.60.7
    Long-term interest rate10.50.70.31.51.60.80.2-0.2
    Exchange rate ($/DM)4.98.54.6-4.4-2.41.80.8-0.4
    General government
    balance/GDP1-0.1-0.3-0.20.20.1-0.5-0.50.1
    Current account balance/GDP10.10.10.20.30.50.30.10.1
    France
    Real GDP-0.4-1.2-1.7-1.4-1.0-2.0-2.7-2.6
    Unemployment rate10.20.61.01.21.21.62.12.4
    Real consumption-0.7-1.7-2.3-1.5-1.6-2.6-3.0
    Real investment-1.9-4.3-3.9-0.8-1.3-5.3-5.9-4.2
    GDP deflator0.81.72.66.08.57.97.16.4
    Short-term interest rate10.20.70.50.92.12.21.70.8
    Long-term interest rate10.71.00.41.31.40.80.2-0.2
    Exchange rate ($/FF)5.98.84.7-4.7-2.81.80.8-0.3
    General government balance/GDP1-0.3-0.30.30.5-0.3
    Current account balance/GDP10.20.20.20.10.30.30.20.1
    Italy
    Real GDP-0.5-1.2-1.5-1.2-1.1-2.2-2.9-2.7
    Unemployment rate10.20.61.01.11.11.62.22.5
    Real consumption-0.6-1.5-2.1-1.5-1.7-2.7-3.2
    Real investment-1.8-4.0-3.7-1.1-1.9-5.5-6.1-4.4
    GDP deflator0.71.62.76.28.78.07.26.5
    Short-term interest rate10.20.60.51.02.32.41.70.8
    Long-term interest rate10.71.10.51.41.50.90.3-0.2
    Exchange rate ($/Lit)5.99.15.1-4.8-3.01.60.5-0.8
    General government
    balance/GDP1-0.30.30.20.2-0.4-0.50.1
    Current account balanee/GDP10.20.30.30.10.10.10.10.2
    United Kingdom
    Real GDP-0.3-1.2-1.6-1.2-0.7-1.9-2.8-2.8
    Unemployment rate10.20.61.01.11.01.42.02.4
    Real consumption0.1-0.5-1.5-1.8-0.8-1.0-2.2-2.6
    Real investment-2.0-4.7-4.0-0.2-0.9-5.8-6.8-5.1
    GDP deflator0.71.52.45.78.27.67.06.6
    Short-term interest rate10.10.40.20.82.02.11.50.8
    Long-term interest rate10.60.80.31.21.40.80.3-0.1
    Exchange rate ($/£)5.69.15.2-4.2-2.02.92.01.0
    General government balance/GDP1-0.2-0.3-0.2-0.1-0.3-0.30.2
    Current account balance/GDP10.30.30.1-0.3-0.10.10.1
    Canada
    Real GDP-0.6-1.2-0.60.2-0.51.9-2.5-2.4
    Unemployment rate10.51.30.8-0.30.11.62.42.6
    Real consumption0.10.20.4-0.9-0.1-1.2-1.6
    Real investment-0.7-2.0-1.40.8-0.6-4.8-5.8-4.6
    GDP deflator0.20.82.05.77.97.16.66.4
    Short-term interest rate1-0.2-0.5-0.41.02.32.01.50.5
    Long-term interest rate10.10.2-0.11.51.60.70.3
    Exchange rate (S/C$)4.811.76.5-4.9-1.74.03.22.3
    General government balance/GDP10.10.20.2-0.3-0.7-0.8-0.40.3
    Current account balance/GDP10.30.90.5-0.6-0.50.30.3
    Smaller industrial countries
    Real GDP-0.6-1.4-1.5-0.9-0.9-2.1-3.0-2.9
    Unemployment rate’0.20.71.01.01.01.52.12.5
    Real consumption-0.6-1.4-1.7-0.9-1.2-2.4-2.9
    Real investment-1.7-3.9-3.4-0.5-1.4-5.6-6.4-4.6
    GOP deflator0.51.32.46.08.57.97.16.4
    Short-term interest rate10.10.40.20.92.22.31.70.8
    Long-term interest rate10.50.80.31.41.60.90.3-0.2
    Exchange rate ($/local currency)5.18.94.8-4.5-2.32.21.1-0.1
    General government balance/GDP1-0.1-0.3-0.20.1-0.4-0.4
    Current account balance/GDP10.10.10.10.10.20.1

    In percentage points.

    The “optimistic” scenario in Chapter III, in which the cyclical expansion is used to implement greater fiscal consolidation and structural reform than in the baseline, also comprises two simulations. The first simulation involves policies that reduce the structural unemployment rate. For all industrial countries except Japan, a decline of 2 percent of GDP in labor income taxes is assumed to be phased in gradually over two years and financed by an equivalent increase in the tax on consumer goods, leaving overall revenue roughly unchanged in an ex ante sense.4 This policy was not simulated for Japan, which recently implemented a fiscal restructuring of this type and magnitude, and which has a very low structural unemployment rate.

    The reduction in labor taxes narrows the wedge between actual and take-home pay, reduces the reservation wage of workers, and lowers the natural rate of unemployment. By contrast, the increase in the consumption tax does not affect the natural rate because it reduces labor and nonlabor disposable income to the same extent. The net result of this restructuring of the tax system is a decline in the natural rate of unemployment of 1 percentage point on average.5 Although the higher consumption tax raises consumer prices on impact, this is offset by a compensating increase in money supply—the monetary authorities are assumed to accommodate the onetime impact of the consumption tax on the price level, but not any second-round inflationary effects. In addition to the fiscal restructuring, it is assumed that various structural policies are implemented in all countries, except the United States and Japan, that gradually lower the natural rate of unemployment by another 1 percentage point. It should be noted that this simulation was carried out under the constraint of a neutral long-run fiscal policy, defined as an unchanged ratio of public debt to GDP. Thus, in this simulation the government is assumed to react to the initial higher tax revenues due to the positive output effects by lowering tax burdens over the medium term.

    The two tax changes leave real disposable income roughly unchanged, and, in view of the monetary accommodation, the price increase resulting from the VAT has only a modest effect on interest rates. However, the resulting decline in the natural rate of unemployment raises output, lowers interest rates, and provides for an increase in both consumption and investment. The additional, exogenous decline in the natural rate of unemployment amplifies these effects in most countries. The effect on prices is mixed: the increase in the VAT and monetary accommodation tend to raise prices, but the decline in the natural rate lowers wages and prices. The differences in output effects across the European countries over the medium term reflect different speeds of adjustment in the labor market as well as different long-run effects on the natural rate from changes in labor taxes.

    The second simulation of the “optimistic” scenario assumes fiscal consolidation efforts are put in place to permanently reduce the outstanding stock of public debt relative to the baseline. This is implemented through a permanent ex ante decline in government expenditures in all the industrial countries of 2 percent of GDP, phased in gradually over three years. As a result, the debt-to-GDP ratio is down by 10 percent by 2000, and by 20 percent by 2005. The output costs of this enhanced debt reduction are minimal; output growth increases after the first year, and in all countries the level of output is above the baseline level by 1998. Indeed, the level of output is permanently higher because investment spending is “crowded in” by lower interest rates. An important feature of this simulation is the assumption that debt reduction is credible. That is, households and firms expect (correctly) that public debt levels will fall in the future, and as a result real interest rates are pushed down immediately. An alternative simulation, which is not shown here, assumed that the future fiscal cuts would not be immediately credible, which would result in noticeably higher short-run costs, although the long-run crowding-in benefits would be similar.

    The combined effects of the fiscal restructuring, the decline in the natural rate of unemployment owing to structural reform, and fiscal consolidation—which corresponds to the second scenario in Chapter III—are shown in Table 24.

    Table 24.“Optimistic” Scenario(Percentage deviation from baseline unless otherwise noted)
    19951996199719981999200020012002
    United States
    Real GDP-0.6-0.3-0.30.51.11.41.51.4
    Unemployment rate10.50.50.60.2-0.40.9-1.1-1.2
    Real consumption-0.21.12.13.23.94.24.34.2
    Real investment1.63.64.34.23.63.12.82.9
    GDP deflator0.3-0.30.30.50.40.3
    Short-term interest rate1-0.4-1.2-1.8-1.7-1.1-0.40.10.2
    Long-term interest rale1-1.2-1.2-1.0-0.6-0.2-0.1
    General government balance/GDP10.61.62.52.62.52.22.12.1
    Current account balance/GDP10.10.20.30.20.20.20.10.1
    Japan
    Real GDP-0.30.20.60.80.80.70.6
    Unemployment rate10.10.1
    Real consumption-0.11.01.92.93.53.73.83.7
    Real investment2.54.75.16.73.93.22.8
    GDP deflator-1.3-1.9-2.11.8-1.6-1.4-1.3-1.2
    Short-term interest rate1-0.7-1.3-1.7-1.5-1.10.5-0.2
    Long-term interest rate1-1.3-1.2-1.0-0.7-0.3-0.1-0.1-0.1
    Exchange rate ($/¥)2.52.72.82.72.52.42.52.6
    General government balance/GDP10.81.72.32.32.22.12.12.2
    Current account balance/GDP1-0.1-0.2-0.3-0.5-0.4-0.3-0.2-0.1
    Germany
    Real GDP0.32.13.34.13.62.72.01.6
    Unemployment rate1-0.1-0.8-1.6-2.5-2.8-2.8-2.4-2.1
    Real consumption2.13.85.76.66.76.35.7
    Real investment-4.18.912.011.17.64.62.92.5
    GDP deflator-0.62.4-5.4-3.4-1.9-1.0-0.6-0.4
    Short-term Interest rate1-0.5-1.8-3.7-3.4-2.1-0.50.61.0
    Long-term interest rate1-2.3-2.3-1.8-0.90.50.60.4
    Exchange rate ($/DM)-2.8-2.7-2.1-0.31.42.32.52.0
    General government balance/GDP10.72.03.13.32.61.91.41.4
    Current account balance/GDP1-0.1-0.1
    France
    Real GDP0.21.93.14.24.23.22.21.5
    Unemployment rate1-0.7-1.6-2.5-3.0-3.0-2.72.2
    Real consumption-0.12.14.26.27.37.46.85.9
    Real Investment4.810.413.712.47.93.91.50.9
    GDP deflator-1.1-3.36.1-4.0-2.0-0.60.10.3
    Short-term interesl rate1-0.7-2.4-4.4-4.1-2.4-0.41.11.8
    Long term interest rate1-2.8-2.7-2.0-0.80.31.01.10.7
    Exchange rate ($/FF)-3.8-2.5-2.40.12.53.82.72.7
    General government balance/GDP10.51.82.93.63.12.21.61.3
    Current account balance/GDP1-0.1-0.2-0.20.10.20.10.1
    Italy
    Real GDP0.42.23.44.54.54.13.32.7
    Unemployment rate1-0.2-0.9-1.8-2.7-3.3-3.5-3.4-3.0
    Real consumption-0.21.73.65.67.17.87.66.9
    Real investment4.810.413.512.810.16.63.82.4
    GDP deflator-1.1-3.5-6.6-5.0-3.4-1.9-0.9-0.4
    Short-term interest rate1-0.7-2.3-4.4-4.4-3.0-1.10.61.5
    Long-term interest rate1-3.0-3.1-2.5-1.3-0.10.81.21.1
    Exchange rate ($/Lit)-5.4-5.2-4.2-1.70.92.73.42.9
    General government balance/GDP10.62.13.54.23.42.00.90.4
    Current account balance/GDP1-0.2-0.2-0.1-0.1-0.2-0.1-0.1
    United Kingdom
    Real GDP0.22.13.34.74.74.13.22.5
    Unemployment rate1-0.1-0.8-1.7-2.7-3.4-3.5-3.4-2.9
    Real consumption-0.31.83.75.97.17.47.06.3
    Real investment5.611.915.314.510.77.04.53.1
    GDP deflator-1.0-3.0-5.7-4.3-2.9-1.8-1.1-0.7
    Shon-term interest rate1-0.6-2.0-3.8-3.7-2.4-0.80.51.2
    Long-term interest rate1-2.5-2.6-2.1-1.1-0.10.60.90.8
    Exchange rate ($/£)-4.3-4.1-3.41.60.41.72.11.6
    General government balance/GDP0.62.13.33.62.92.01.31.1
    Current account balance/GDP1-0.3-0.20.10.10.1
    Canada
    Real GDP0.41.72.83.94.24.03.83.5
    Unemployment rate 1-0.3-1.3-2.2-3.2-3.8-3.9-3.8-3.5
    Real consumption-0.31.22.44.35.56.16.26.1
    Real investment3.68.011.311.810.38.97.87.4
    GDP deflator-0.1-1.9-4.8-3.6-2.9-2.5-2.32.2
    Short-term interest rate1-0.1-1.0-2.6-2.7-2.0-1.1-0.4
    Long-term interest rate1-1.7-1.9-1.8-1.2-0.7-0.3-0.1-0.1
    Exchange rate ($/C$)-3.6-3.9-4.0-3.2-2.3-1.4-0.7-0.3
    General government balance/GDP10.61.83.03.52.32.31.81.6
    Current account balance/GDP1-0.2-0.2-0.20.1-0.1-0.2-0.3
    Smaller industrial countries
    Real GDP0.42.03.44.34.23.52.72.0
    Unemployment rate1-0.2-0.8-1.7-2.6-3.1-3.2-2.9-2.5
    Real consumption-0.11.73.45.46.66.86.45.7
    Real investment4.810.213.212.38.85.63.62.9
    GDP deflator-0.7-2.9-5.8-4.0-2.51.3-0.7-0.5
    Short-term interest rate1-0.5-1.9-3.8-3.7-2.3-0.70.61.2
    Long-term interest rate-2.4-2.5-2.0-1.00.60.70.5
    Exchange rate ($/local currency)-3.3-3.2-2.6-0.71.22.42.62.1
    General government balance/GDP10.72.03.23.62.81.91.31.2
    Current account balance/GDP1-0.10.20.20.20.10.1

    In percentage points.

    Notes

    This annex was prepared by Steven Symansky.

    See Paul Masson, Steven Symansky, and Guy Meredith, “MULTIMOD Mark II: A Revised and Extended Model,” IMF Occasional Paper 71 (July 1990), for a description of the basic model; and Leonardo Bartolini, Assaf Razin, and Steven Symansky, “Fiscal Restructuring in the G-7” (IMF working paper, forthcoming) for recent enhancements, including an explicit treatment of taxation and the labor market. The fiscal and monetary properties of the enhanced model are similar to those of the earlier version of the model.

    As used here, hysteresis refers to the tendency for cyclical increases in unemployment to be transformed into increases in structural unemployment.

    The increase in the natural rate could also have been assumed to occur through an exogenous decline in labor demand. Although the output and inflation effects would be similar, the composition of demand would be different because real wages would fall rather than increase.

    In MULTIMOD, the consumption tax is not a true value-added tax (VAT) because it is assumed to be applied only to consumption goods and follows the destination taxation principle.

    The theoretical and empirical relationship between labor taxes and the natural rate of unemployment, which is very important to the simulated results in this scenario, is discussed in detail in Bartolini, Razin, and Symansky, “Fiscal Restructuring in the G-7.”

    Statistical Appendix

    Assumptions

    The statistical tables in this appendix have been compiled on the basis of information available on September 12, 1994. The estimates and projections for 1994 and 1995, as well as those for the 1996–99 medium-term scenario, are based on a number of assumptions and working hypotheses.

    • For the industrial countries, real effective exchange rates are assumed to remain constant at their average level during August 1–23, 1994, except for the bilateral exchange rates among the ERM currencies, which are assumed to remain constant in nominal terms. For 1994 and 1995, these assumptions imply average U.S. dollar/SDR conversion rates of 1.428 and 1.456, respectively.

    • “Established” policies of national authorities will be maintained.

    • The price of oil will average $15.16 a barrel in 1994 and $15.15 a barrel in 1995. In the medium term, the oil price is assumed to remain unchanged in real terms.

    • Interest rates, as represented by the London interbank offered rate (LIBOR) on six-month U.S. dollar deposits, will average 5 percent in 1994 and 6 percent in 1995; the three-month certificate of deposit rate in Japan will average 1.9 percent in 1994 and 2.7 percent in 1995; and the three-month interbank deposit rate in Germany will average 5.2 percent in 1994 and 4.8 percent in 1995.

    Data and Conventions

    Data and projections for more than 180 countries form the statistical basis for the World Economic Outlook (the World Economic Outlook data base). The data are maintained jointly by the IMF’s Research Department and the area departments, with the latter regularly preparing country projections based on consistent global assumptions, such as those summarized above.

    Although national statistical agencies are the ultimate providers of historical data and definitions, international organizations are also involved in statistical issues, with the aim of harmonizing differences among national statistical systems, of setting international standards with respect to definitions, and of providing conceptual frameworks for measurement and presentation of economic statistics. As regards the World Economic Outlook data base, updates and revisions by both national source agencies and international organizations are used.

    Over the past several years, two developments of major importance for improving the standards of economic statistics and analysis have been the comprehensive work to revise the United Nations’ standardized System of National Accounts (SNA) and the IMF’s Balance of Payments Manual. Work on both projects was completed in late 1993, and the System of National Accounts 1993 as well as the fifth edition of the Balance of Payments Manual have been issued.1 The IMF was actively involved in both projects, particularly the new Balance of Payments Manual, which is central to the IMF’s interest in countries’ external positions. Key changes introduced with the new Manual were summarized in the May 1994 World Economic Outlook (Box 13).

    Composite data for country groups in the World Economic Outlook are either sums or weighted averages of data for individual countries. Arithmetic weighted averages are used for all data except inflation and money growth for nonindustrial country groups, for which geometric averages are used. The following conventions apply.

    • Country group composites for interest rates, exchange rates, and the growth of monetary aggregates are weighted by GDP converted to U.S. dollars at market exchange rates (averaged over the preceding three years) as a share of world or group GDP.

    • Composites for other data relating to the domestic economy, whether growth rates or ratios, are weighted by GDP valued at purchasing power parities (PPPs) as a share of total world or group GDP.2

    • Composite unemployment rates and employment growth are weighted by labor force as a share of group labor force.

    • For data relating to the external economy (balance of payments and debt), composites are sums of individual country data after conversion to U.S. dollars at the average (for debt, end of period) exchange rates in the years indicated. Composites of foreign trade unit values, however, are arithmetic averages of percentage changes for individual countries weighted by the U.S. dollar value of exports or imports as a share of total world or group exports or imports (in the preceding year). Group composites of trade volumes are derived as sums of trade values (on a balance of payments basis) deflated by corresponding unit-value group composites.

    For central and eastern European countries in existence before 1991, external transactions in nonconvertible currencies (through 1990) are converted to U.S. dollars at the implicit U.S. dollar/ruble conversion rates obtained from each country’s national currency exchange rate for the U.S. dollar and for the ruble. Trade among the Baltic states, Russia, and other countries of the former Soviet Union is not yet included in the data for these countries’ external transactions because of insufficient information.

    Unless otherwise indicated, multiyear averages of growth rates are expressed as compound annual rates of change.

    Classification of Countries

    Summary of the Country Classification

    The country classification in the World Economic Outlook divides the world into three major groups: industrial countries, developing countries, and countries in transition.3 Rather than being based on strict criteria, economic or otherwise, this classification has evolved over time and is intended only to facilitate the analysis and provide a reasonably meaningful organization of data. Each of the three main country groups is further divided into a number of subgroups. Tables A and B provide an overview by these standard groups in the World Economic Outlook, showing the number of countries in each group and the average 1990 shares of groups in aggregate PPP-valued GDP, total exports of goods and services, and total debt outstanding.

    The general features and the compositions of groups in the World Economic Outlook classification are as follows.4

    The group of industrial countries (23 countries) comprises

    • Australia

    • Austria

    • Belgium

    • Canada

    • Denmark

    • Finland

    • France

    • Germany

    • Greece

    • Iceland

    • Ireland

    • Italy

    • Japan

    • Luxembourg

    • Netherlands

    • New Zealand

    • Norway

    • Portugal

    • Spain

    • Sweden

    • Switzerland

    • United Kingdom

    • United States

    The seven largest countries in this group in terms of GDP—the United States, Japan, Germany, France, Italy, the United Kingdom, and Canada—are collectively referred to as the major industrial countries.

    The members of the European Union (12 countries) are also distinguished as a subgroup.5 They are

    • Belgium

    • Denmark

    • France

    • Germany

    • Ireland

    • Italy

    • Luxembourg

    • Netherlands

    • Portugal

    • Spain

    • United Kingdom

    In 1991 and subsequent years, data for Germany refer to west Germany and the new eastern Lander (that is, the former German Democratic Republic). Before 1991, economic data are not available on a unified basis or in a consistent manner. In general, data on national accounts and domestic economic and financial activity through 1990 cover west Germany only, whereas data for the central government, foreign trade, and balance of payments apply to west Germany through June 1990 and to unified Germany thereafter.

    The group of developing countries (130 countries) includes all countries that are not classified as industrial countries or as countries in transition, together with a few dependent territories for which adequate statistics are available.

    The regional breakdowns of developing countries in the World Economic Outlook conform to the IMF’s International Financial Statistics (IFS) classification, with one important exception. Because all of the developing countries in Europe except Cyprus, Malta, and Turkey are included in the group of countries in transition, the World Economic Outlook classification places these three countries in a combined Middle East and Europe region. It should also be noted that Egypt and the Libyan Arab Jamahiriya are included in this region, not in Africa. Two additional regional groupings are included in the World Economic Outlook because of their analytical significance. These are sub-Saharan Africa6 and four newly industrializing Asian economies.7

    Table A.Industrial Countries: Classification by Standard World Economic-Outlook Groups, and Their Shares in Aggregate GDP and Exports of Goods and Services, 19901
    Percentage of
    Total GDP ofTotal exports of goods and services of
    Number of Countries Included in GroupIndustrial countriesWorldIndustrial countriesWorld
    Industrial countries23100.055.7100.075.9
    United States38.621.518.213.8
    Japan15.38.611.78.9
    Germany8.24.613.710.4
    France6.93.99.77.3
    Italy6.53.66.24.7
    United Kingdom6.43.69.97.5
    Canada3.62.04.03.1
    Other industrial countries1614.48.026.620.2
    Industrial country groups
    seven major industrial countries785.647.773.455.7
    European Union1236.220.255.141.8
    Industrial countries except the United States, Japan, and Germany209.95.515.011.4
    Seven major industrial countries except the United States647.126.255.241.9
    Major European industrial countries428.115.739.529.9

    The GDP shares are based on the purchasing power parity (PPP) valuation of country GDPs.

    The developing countries are also grouped according to analytical criteria: predominant export, financial criteria, and other groups. The export criteria are based on countries’ export composition in 1984–86, whereas the financial criteria reflect net creditor and debtor positions as of 1987, sources of borrowing as of end-1989, and experience with debt servicing during 1986–90.

    The first analytical criterion, by predominant export, distinguishes among five groups: fuel (Standard International Trade Classification—SITC 3); manufactures (SITC 5 to 8, less diamonds and gemstones); nonfuel primary products (SITC 0, 1, 2, 4, and diamonds and gemstones); services and private transfers; and diversified export base. A further distinction is made among the exporters of nonfuel primary products on the basis of whether countries’ exports of primary commodities consist primarily of agricultural commodities (SITC 0, 1, 2 except 27, 28, and 4) or minerals (SITC 27 and 28, and diamonds and gemstones).

    The financial criteria first distinguish between net creditor and net debtor countries. Countries in the latter, much larger group are then differentiated on the basis of two additional financial criteria: by predominant type of creditor and by experience with debt servicing.

    The country groups shown under other groups constitute the small low-income economies, the least developed countries, and 15 heavily indebted countries.

    The group of countries in transition (28 countries) comprises central and eastern European countries, Russia, non-European states of the former Soviet Union, and Mongolia. A common characteristic of these countries is the transitional state of their economies from a centrally administered system to one based on market principles. The group of countries in transition comprises

    • Albania

    • Armenia

    • Azerbaijan

    • Belarus

    • Bosnia and Herzegovina

    • Bulgaria

    • Croatia

    • Czech Republic

    • Estonia

    • Georgia

    • Hungary

    • Kazakhstan

    • Kyrgyz Republic

    • Latvia

    • Lithuania

    • Macedonia. Former Yugoslav Rep. of

    • Moldova

    • Mongolia

    • Poland

    • Romania

    • Russia

    • Slovak Republic

    • Slovenia

    • Tajikistan

    • Turkmenistan

    • Ukraine

    • Uzbekistan

    • Yugoslavia, Fed. Rep. of (Serbia/Montenegro)

    Table B.Developing Countries and Countries in Transition: Classification by Standard World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Total Debt Outstanding, 19901
    Number of Countries Included in GroupPercentage of
    Total GDP ofTotal exports of goods and services ofTotal debt of
    Developing countriesWorldDeveloping countriesWorldDeveloping countries
    Developing countries130100.033.4100.020.2100.0
    By region
    Africa5011.83.910.02.017.4
    Asia2851.417.252.110.528.2
    Middle East and Europe1813.04.321.34.321.0
    Western Hemisphere3423.98.016.63.433.5
    Sub-Saharan Africa454.41.53.40.78.9
    Four newly industrializing Asian economies46.92.332.16.53.7
    By predominant export
    Fuel1923.47.826.85.430.7
    Nonfuel exports11176.625.673.214.869.3
    Manufacturers1150.016.751.310.431.3
    Primary products5410.93.77.91.619.7
    Agricultural products408.32.85.41.114.1
    Minerals142.60.92.50.55.7
    Services and private transfers336.62.24.30.98.8
    Diversified export base139.13.09.61.99.4
    By financial criteria
    Net creditor countries87.02.321.64.44.1
    Net debtor countries12293.031.178.415.995.9
    Market borrowers2250.016.753.510.843.4
    Diversified borrowers3128.59.516.53.331.0
    Official borrowers6914.54.98.41.721.5
    Countries with recent debt-servicing difficulties7237.812.626.45.460.0
    Countries without debt-servicing difficulties5055.218.452.010.535.9
    Other groups
    Small low-income economies459.43.13.20.710.8
    Least developed countries465.21.72.10.48.2
    Fifteen heavily indebted countries1528.19.420.14.138.9
    Countries in transition22410.93.9

    The GDP shares are based on the purchasing power parity (PPP) valuation of country GDPs.

    Including Mongolia.

    Beginning with this World Economic Outlook, a regional breakdown replaces the previous classification of countries in transition (central Europe and former U.S.S.R.). The countries in transition are now classified in three subgroups: central and eastern Europe, Russia, and Transcaucasus and central Asia. The Transcaucasian and central Asian countries include Kazakhstan for purposes of the World Economic Outlook. The countries in central and eastern Europe (18 countries) are

    • Albania

    • Belarus

    • Bosnia and

    • Herzegovina

    • Bulgaria

    • Croatia

    • Czech Republic

    • Estonia

    • Hungary

    • Latvia

    • Lithuania

    • Macedonia, Former

    • Yugoslav Rep. of

    • Moldova

    • Poland

    • Romania

    • Slovak Republic

    • Slovenia

    • Ukraine

    • Yugoslavia, Fed. Rep, of (Serbia/Montenegro)

    The countries in the Transcaucasian and central Asian group (9 countries) are

    • Armenia

    • Azerbaijan

    • Georgia

    • Kazakhstan

    • Kyrgyz Republic

    • Mongolia

    • Tajikistan

    • Turkmenistan

    • Uzbekistan

    Detailed Description of the Developing Country Classification by Analytical Group

    Countries Classified by Predominant Export

    Fuel exporters (19 countries) are countries whose average ratio of fuel exports to total exports in 1984–86 exceeded 50 percent. The group comprises

    • Algeria

    • Angola

    • Cameroon

    • Congo

    • Ecuador

    • Gabon

    • Indonesia

    • Iran, Islamic Rep. of

    • Iraq

    • Kuwait

    • Libya

    • Mexico

    • Nigeria

    • Oman

    • Qatar

    • Saudi Arabia

    • Trinidad and Tobago

    • United Arab Emirates

    • Venezuela

    Nonfuel exporters (111 countries) are countries with total exports of goods and services including a substantial share of (a) manufactures, (b) primary products, or (c) services and private transfers. However, those countries whose export structure is so diversified that they do not fall clearly into any one of these three groups are assigned to a fourth group, (d) diversified export base.

    (a) Economies whose exports of manufactures accounted for over 50 percent of their total exports on average in 1984–86 are included in the group of exporters of manufactures (11 countries). This group includes

    • Brazil

    • China

    • Hong Kong

    • India

    • Israel

    • Korea

    • Singapore

    • Taiwan Province of China

    • Thailand

    • Tunisia

    • Turkey

    (b) The group of exporters of primary products (54 countries) consists of those countries whose exports of agricultural and mineral primary products (SITC 0, 1, 2, 4, and diamonds and gemstones) accounted for at least half of their total exports on average in 1984–86, These countries are

    • Afghanistan

    • Islamic State of Argentina

    • Bhutan

    • Bolivia

    • Botswana

    • Burundi

    • Central African Rep.

    • Chad

    • Chile

    • Colombia

    • Comoros

    • Costa Rica

    • Cóte d’Ivoire

    • Djibouti

    • Dominica

    • El Salvador

    • Equatorial Guinea

    • Gambia. The

    • Ghana

    • Guatemala

    • Guinea

    • Guinea-Bissau

    • Guyana

    • Honduras

    • Kenya

    • Lao People’s Dem. Rep.

    • Liberia

    • Madagascar

    • Malawi

    • Mali

    • Mauritania

    • Mauritius

    • Myanmar

    • Namibia

    • Nicaragua

    • Niger

    • Papua New Guinea

    • Paraguay

    • Peru

    • Rwanda

    • São Tomé and Principe

    • Solomon Islands

    • Somalia

    • Sri Lanka

    • St. Vincent and the Grenadines

    • Sudan

    • Suriname

    • Swaziland

    • Togo

    • Uganda

    • Uruguay

    • Viet Nam

    • Zaïre

    • Zambia

    Among exporters of primary products, a further distinction is made between exporters of agricultural products and minerals. The group of mineral exporters (14 countries) comprises

    • Bolivia

    • Botswana

    • Chile

    • Guinea

    • Guyana

    • Liberia

    • Mauritania

    • Namibia

    • Niger

    • Peru

    • Suriname

    • Togo

    • Zaïre

    • Zambia

    All other exporters of primary products are classified as agricultural exporters (40 countries).

    (c) The exporters of services and recipients of private transfers (33 countries) are defined as those countries whose average income from services and private transfers accounted for more than half of total average export earnings in 1984–86. This group comprises

    • Antigua and Barbuda

    • Aruba

    • Bahamas, The

    • Barbados

    • Burkina Faso

    • Cambodia

    • Cape Verde

    • Cyprus

    • Dominican Rep.

    • Egypt

    • Ethiopia

    • Fiji

    • Grenada

    • Jamaica

    • Jordan

    • Kiribati

    • Lebanon

    • Lesotho

    • Maldives

    • Malta

    • Mozambique, Rep, of Nepal

    • Netherlands Antilles

    • Pakistan

    • Panama

    • Seychelles

    • St. Kitts and Nevis

    • St. Lucia

    • Tanzania

    • Tonga

    • Vanuatu

    • Western Samoa Yemen, Rep. of

    (d) Countries with a diversified export base (13 countries) are those whose export earnings in 1984–86 were not dominated by any one of the categories mentioned under (a) through (c) above. This group comprises

    • Bahrain

    • Bangladesh

    • Belize

    • Benin

    • Haiti

    • Malaysia

    • Morocco

    • Philippines

    • Senegal

    • Sierra Leone

    • South Africa

    • Syrian Arab Rep.

    • Zimbabwe

    Countries Classified by Financial Criteria

    Net creditor countries (8 countries) are defined as developing countries that were net external creditors in 1987 or that experienced substantial cumulated current account surpluses (excluding official transfers) between 1967–68 (the beginning of most balance of payments series in the World Economic Outlook data base) and 1987. The net creditor group consists of the following economies:

    • Iran, Islamic Rep. of

    • Kuwait

    • Libya

    • Oman

    • Qatar

    • Saudi Arabia

    • Taiwan Province of China

    • United Arab Emirates

    Net debtor countries (122 countries) are disaggregated according to two criteria: (a) predominant type of creditor and (b) experience with debt servicing.

    (a) Within the classification by predominant type of creditor (sources of borrowing), three subgroups are identified: market borrowers, official borrowers, and diversified borrowers.

    Market borrowers (22 countries) are defined as net debtor countries with more than two-thirds of their total liabilities outstanding at the end of 1989 owed to commercial creditors. This group comprises

    • Algeria

    • Antigua and Barbuda

    • Argentina

    • Bahamas, The

    • Brazil

    • Chile

    • China

    • Hong Kong

    • Israel

    • Kiribati

    • Korea

    • Malaysia

    • Mexico

    • Panama

    • Papua New Guinea

    • Peru

    • Singapore

    • Suriname

    • Thailand

    • Trinidad and Tobago

    • Uruguay

    • Venezuela

    Official borrowers (69 countries) are defined as net debtor countries with more than two-thirds of their total liabilities outstanding at the end of 1989 owed to official creditors. This group comprises

    • Afghanistan, Islamic State of

    • Aruba

    • Bangladesh

    • Belize

    • Bhutan

    • Bolivia

    • Botswana

    • Burkina Faso

    • Burundi

    • Cambodia

    • Cameroon

    • Cape Verde

    • Central African Rep.

    • Chad

    • Comoros

    • Djibouti

    • Dominica

    • Dominican Rep.

    • Egypt

    • El Salvador

    • Equitorial Guinea

    • Ethiopia

    • Gabon

    • Gambia. The

    • Ghana

    • Grenada

    • Guinea

    • Guinea-Bissau

    • Guyana

    • Haiti

    • Honduras

    • Jamaica

    • Lao People’s Dem. Rep.

    • Lesotho

    • Madagascar

    • Malawi

    • Maldives

    • Mali

    • Malta

    • Mauritania

    • Mauritius

    • Morocco

    • Mozambique, Rep. of

    • Myanmar

    • Nambia

    • Nepal

    • Netherlands Antilles

    • Nicaragua

    • Niger

    • Nigeria

    • Pakistan

    • Rwanda

    • São Tomé and

    • Principe

    • Somalia

    • St. Kitts and Nevis

    • St. Lucia

    • St. Vincent and the

    • Grenadines

    • Sudan

    • Swaziland

    • Tanzania

    • Togo

    • Tonga

    • Tunisia

    • Uganda

    • Viet Nam

    • Western Samoa

    • Yemen. Rep, of

    • Zaïre

    • Zambia

    Diversified borrowers (31 countries) consist of those net debtor developing countries that are classified neither as market nor as official borrowers.

    (b) Within the classification by experience with debt servicing, a further distinction is made. Countries with recent debt-servicing difficulties (72 countries) are defined as those countries that incurred external payments arrears or entered into official or commercial bank debt-rescheduling agreements during 1986–90. Information on these developments is taken from relevant issues of the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions.

    All other net debtor countries are classified as countries without debt-servicing difficulties (50 countries).

    Other Groups

    The group of small low-income economies (45 countries) include those IMF members—excluding China and India—whose GDP per capita, as estimated by the World Bank, did not exceed the equivalent of $425 in 1986. This group comprises

    • Afghanistan, Islamic State of

    • Bangladesh

    • Benin

    • Bhutan

    • Burkina Faso

    • Burundi

    • Cambodia

    • Central African Rep.

    • Chad

    • Comoros

    • Equitorial Guinea

    • Ethiopia

    • Gambia, The

    • Ghana

    • Guinea

    • Guinea-Bissau

    • Guyana8

    • Haiti

    • Kenya

    • Lao People’s Dem. Rep.

    • Lesotho

    • Madagascar

    • Malawi

    • Maldives

    • Mali

    • Mauritania

    • Mozambique, Rep. of

    • Myanmar

    • Nepal

    • Niger

    • Pakistan

    • Rwanda

    • São Tomé and Principe

    • Senegal

    • Sierra Leone

    • Somalia

    • Sri Lanka

    • Sudan

    • Tanzania

    • Togo

    • Uganda

    • Vanuatu

    • Viet Nam

    • Zaïre

    • Zambia

    The countries currently classified by the United Nations as the least developed countries (46 countries) are9

    • Afghanistan, Islamic State of

    • Bangladesh

    • Benin

    • Bhutan

    • Botswana

    • Burkina Faso

    • Burundi

    • Cambodia

    • Cape Verde

    • Central African Rep.

    • Chad

    • Comoros

    • Djibouti

    • Equitorial Guinea

    • Ethiopia

    • Gambia, The

    • Guinea

    • Guinea-Bissau

    • Haiti

    • Kiribati

    • Lao People’sDem. Rep.

    • Lesotho

    • Liberia

    • Madagascar

    • Malawi

    • Maidives

    • Mali

    • Mauritania

    • Mozambique. Rep. of

    • Myanmar

    • Nepal

    • Niger

    • Rwanda

    • São Tomé and Principe

    • Sierra Leone

    • Solomon Islands

    • Somalia

    • Sudan

    • Tanzania

    • Togo

    • Uganda

    • Vanuatu

    • Western Samoa

    • Yemen, Rep. of

    • Zaïre

    • Zambia

    The group of 15 heavily indebted countries10 (the Baker Plan countries) includes those countries associated with the “Program for Sustained Growth” proposed by the Governor for the United States at the 1985 IMF-World Bank Annual Meetings in Seoul. This group comprises

    • Argentina

    • Bolivia

    • Brazil

    • Chile

    • Colombia

    • Côte d’lvoire

    • Ecuador

    • Mexico

    • Morocco

    • Nigeria

    • Peru

    • Philippines

    • Uruguay

    • Venezuela

    • Former Yugoslavia

    List of Tables

    Flow of Funds

    A43. Summary of Sources and Uses of World Saving

    Table A1.Summary of World Output1(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    World3.43.64.04.73.42.20.91.72.33.13.6
    Industrial countries2.82.93.24.43.32.40.81.51.32.72.7
    United States2.92.93.13.92.51.2-0.62.33.13.72.5
    European Union2.32.92.94.33.53.01.21.1-0.32.12.9
    Japan4.22.64.16.24.74.84.31.10.10.92.5
    Other industrial countries2.82.63.44.03.11.0-1.10.61.53.53.5
    Developing countries4.54.85.75.34.23.84.55.96.15.65.6
    By region
    Africa2.42.41.43.93.61.91.40.21.03.34.5
    Asia6.46.78.09.25.75.86.28.28.58.07.3
    Middle East and Europe3.52.56.00.33.74.01.97.04.81.42.5
    Western Hemisphere3.34.13.31.01.60.33.42.53.42.83.3
    By analytical criteria
    Fuel exporters3.40.82.91.25.04.23.95.42.82.13.6
    Nonfuel exporters4.96.26.56.63.93.74.66.07.16.56.1
    Net creditor countries3.20.21.7-0.46.76.96.39.05.02.73.7
    Net debtor countries4.65.26.05.74.03.64.35.66.25.85.7
    Market borrowers5.25.96.96.13.83.36.17.38.06.96.3
    Official borrowers3.64.13.44.04.13.73.72.82.94.45.0
    Countries with recent debt-servicing difficulties3.13.73.81.92.40.22.12.12.93.03.5
    Countries without debt-servicing difficulties6.06.47.78.65.15.95.87.98.27.47.0
    Countries in transition3.73.62.84.32.2-3.5-11.8-15.5-9.0-8.3-1.0
    Central and eastern Europe-11.5-11.7-5.7-5.41.4
    Excluding Belarus and Ukraine-12.6-9.9-2.31.43.1
    Russia-13.0-19.0-12.0-12.0-3.9
    Transcaucasus and central Asia8.2-17.3-10.7-6.60.1
    Memorandum
    Median growth rate
    Industrial countries2.82.73.14.33.82.11.21.20.12.32.9
    Developing countries4.03.43.23.93.73.13.13.53.34.04.1
    Countries in transition3.83.62.85.33.0-2.3-11.7-15.5-11.7-1.02.0
    Output per capita
    Industrial countries2.22.22.63.82.61.60.80.62.02.1
    Developing countries2.02.53.44.70.71.92.53.34.13.63.5
    Countries in transition2.93.02.13.61.6-4.2-11.9-15.7-9.1-8.4-1.1

    Real GDP. For most countries included in the group “countries in transition,” total output is measured by real net material product (NMP) or by NMP-based estimates of GDP

    Table A2.Industrial Countries: Real GDP and Total Domestic Demand(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995Fourth quarter1
    199319941995
    Real GDP
    United Stales2.92.93.13.92.51.2-0.62.33.13.72.53.13.22.1
    Japan4.22.64.16.24.74.84.31.10.10.92.5-0.12.12.9
    Germany 22.22.31.53.73.65.72.92.2-1.12.32.82.83.4
    France2.32.52.34.44.32.50.81.2-1.01.93.0-0.52.73.3
    Italy3.12.93.14.12.92.11.20.7-0.71.52.80.32.73.0
    United Kingdom31.94.34.85.02.20.4-2.0-0.52.03.33.02.73.52.6
    Canada3.43.34.25.02.4-0.2-1.80.62.24.13.83.24.63.5
    Seven countries above2.92.93.24.53.22.30.81.61.42.82.71.73.02.6
    Spain1.63.55.65.24.73.62.20.8-1.0
    Netherlands1.92.71.22.64.74.12.11.40.3
    Belgium1.61.52.05.03.83.41.81.4-1.3
    Denmark2.63.60.31.20.61.41.01.21.2
    Greece 42.81.6-0.54.53.5-1.03.30.9
    Portugal3.14.15.15.45.44.22.21.5-1.0
    Ireland3.40.34.64.37.48.62.95.04.0
    Luxembourg3.25.04.26.47.84.62.72.81.9
    Sweden1.62.33.12.32.41.4-1.1-1.9-2.1
    Switzerland1. 52.92.02.93.92.3-0.1-0.6
    Austria2.31.21.74.13.84.22.71.6-0.3
    Finland3.12.44.15.05.7-7.0-3.6-2.0
    Norway4.14.22.0-0.50.61.71.63.42.3
    Iceland3.46.58.8-0.40.20.51.0-3.71.0
    Australia3.11.94.44.64.61.4-1.02.14.1
    New Zealand1.50.7-1.73.0-0.5-0.1-2.1-0.24.1
    Other industrial countries2.22.63.13.94.02.71.01.00.32.43.1
    All industrial countries2.82.93.24.43.32.40.81.51.32.72.7
    European Union2.32.92.94.33.53.01.21.1-0.32.12.9
    West Germany2.22.31.53.73.65.75.01.8-1.71.82.3-0.52.32.9
    Real total domestic demand
    United States3.33.02.73.01.80.8-1.32.63.94.42.63.93.82.2
    Japan3.43.75.17.65.85.02.90.40.31.63.30.92.73.4
    Germany22.83.32.43.62.95.26.13.0-1.21.72.2
    France2.14.53.34.63.92.80.60.2-1.82.03.0-1.32.43.6
    Italy2.73.04.24.42.82.51.90.8-4.90.53.0-3.52.12.3
    United Kingdom1.94.95.37.92.9-0.6-3.10.32.12.82.93.02.72.2
    Canada3.04.25.35.54.3-0.5-1.00.31.83.12.63.42.72.7
    Other industrial countries1.83.63.74.45.32.50.50.7-1.01.83.0
    All industrial countries2.83.53.64.53.42.20.51.51.12.82.8
    Seven countries above2.93.53.64.53.12.10.51.61.43.02.81.93.12.6
    European Union1.94.03.95.03.82.91.91.2-1.61.62.8
    West Germany1.83.32.43.62.95.24.91.3-2.21.21.6-2.41.92.5

    From fourth quarter of preceding year

    Data through 1990 apply to west Germany only

    Average of expenditure, income, and output estimates of GDP at market prices

    Based on revised national accounts for 1988 onward.

    Table A3.Industrial Countries: Components of Real GDP(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    Private consumer expenditure
    United States3.23.62.83.61.91.5-0.42.83.33.52.5
    Japan3.63.44.25.24.33.92.21.71.12.53.6
    Germany12.03.53.42.72.85.45.43.00.50.40.6
    France2.53.92.93.33.02.71.41.30.71.32.0
    Italy3.43.74.24.23.52.52.71.4-2.10.72.5
    United Kingdom2.16.85.37.53.20.6-2.22.62.62.3
    Canada3.14.44.44.53.41.0-1.51.31.63.13.2
    Other industrial countries1.83.23.33.23.72.62.11.6-0.31.82.7
    All industrial countries2.83.83.44.02.92.41.02.01.62.52.5
    Seven countries above3.03.93.54.22.82.40.92.11.92.62.5
    European Union2.34.23.94.13.43.02.31.70.11.22.0
    West Germany2.03.53.42.72.85.45.72.20.20.10.3
    Public consumption
    United States2.15.23.00.62.03.11.2-0.7-0.8-1.00.3
    Japan3.54.50.42.22.01.91.62.23.22.62.8
    Germany11.82.51.52.1-1.62.20.14.5-1.2-1.00.4
    France2.91.72.83.40.52.12.63.00.51.00.7
    Italy2.82.63.42.80.81.21.61.00.8-0.31.6
    United Kingdom0.91.61.00.71.42.52.60.61.60.6
    Canada2.21.61.74.14.03.22.81.20.5-1.1-0.2
    Other industrial countries3.03.43.32.53.23.13.01.70.60.61.0
    All industrial countries2.43.82.41.71.72.61.71.00.30.10.9
    Seven countries above2.33.92.31.61.52.51.50.90.30.10.9
    European Union2.32.52.72.31.12.31.92.30.30.10.9
    West Germany1.82.51.52.1-1.62.20.34.0-1.2-0.80.6
    Gross fixed capital formation
    United States4.80.4-0.54.20.1-1.7-7.65.511.312.27.6
    Japan3.04.89.611.99.38.83.7-0.8-1.3-0.62.3
    Germany11.23.31.84.46.38.59.64.2-4.54.15.5
    France0.34.54.89.67.92.8-0.7-2.5-5.10.84.3
    Italy1.32.25.06.94.33.80.6-2.0-11.10.25.4
    United Kingdom1.32.610.214.06.0-3.5-9.5-1.20.35.25.0
    Canada3.76.210.810.36.1-3.5-2.2-2.8-0.27.24.3
    Other industrial countries0.55.85.68.68.81.6-2.5-2.3-4.31.85.1
    All industrial countries2.92.83.97.44.61.7-2.51.62.26.05.6
    Seven countries above3.32.33.67.23.91.7-2.52.23.26.65.7
    European Union0.74.25.68.97.03.80.7-0.4-5.32.34.9
    West Germany1.23.31.84.46.38.55.80.3-8.31.63.8
    Final domestic demand
    United States3.23.42.33.11.71.3-1.22.53.74.03.0
    Japan3.43.95.47.05.75.32.60.90.51.53.1
    Germany11.83.22.73.02.65.45.23.6-1.01.01.7
    France2.13.63.34.63.62.61.10.8-0.61.12.2
    Italy2.83.24.24.53.32.62.10.6-3.50.42.9
    United Kingdom1.74.95.27.23.40.2-2.6-0.21.82.92.4
    Canada3.04.25.15.64.10.4-0.80.41.03.12.8
    other industrial countries1.73.73.74.24.82.41.20.8-1.01.62.9
    All industrial countries2.73.63.54.43.22.50.61.61.22.52.8
    Seven countries above2.93.63.44.43.02.50.51.71.52.72.8
    European Union1.93.83.94.73.73.01.91.4-1.01.22.4
    West Germany1.83.22.73.02.65.44.72.1-2.00.31.1
    Stock building2
    United States0.1-0.30.4-0.10.2-0.5-0.10.10.30.4-0.4
    Japan0.1-0.1-0.30.60.2-0.30.3-0.5-0.10.10.2
    Germany10.10.1-0.20.60.3-0.10.9-0.6-0.20.70.5
    France0.90.10.40.2-0.6-0.6-1.20.90.8
    Italy-0.1-0.4-0.10.3-1.50.10.1
    United Kingdom0.20.10.7-0.4-0.8-0.50.50.3-0.10.4
    Canada0.10.1-0.10.2-1.0-0.2-0.10.8-0.2
    Other industrial countries0.10.20.60.2-0.6-0.10.20.1
    All industrial countries0.1-0.10.10.10.2-0.3-0.1-0.1-0.10.3
    Seven countries above0.1-0.10.10.10.1-0.4-0.1-0.10.3
    European Union0.20.30.1-0.1-0.1-0.50.40.4
    West Germany0.10.1-0.20.60.3-0.10.2-0.8-0.20.80.5
    Foreign balance2
    United States-0.5-0.20.30.90.60.40.7-0.3-0.8-0.8-0.2
    Japan0.7-1.0-0.9-1.2-1.1-0.21.30.8-0.3-0.6-0.8
    Germany10.4-0.8-0.80.30.90.7-3.1-0.80.10.60.6
    France0.2-1.9-1.1-0.30.3-0.30.21.00.9-0.1
    Italy-0.1-0.1-1.1-0.5-0.5-0.8-0.14.60.9-0.2
    United Kingdom-0.5-0.5-2.9-0.81.11.2-0.90.40.1
    Canada0.3-0.7-0.9-1.2-1.60.6-0.70.40.30.81.2
    Other industrial countries0.3-1.1-0.8-0.6-1.40.20.50.21.30.60.1
    All industrial countries-0.7-0.4-0.2-0.20.20.30.2-0.2-0.1
    Seven countries above-0.1-0.6-0.3-0.10.10.20.3-0.3-0.1
    European Union0.2-1.0-1.0-0.8-0.3-0.7-0.21.40.50.1
    West Germany0.4-0.8-0.80.30.90.70.40.60.40.70.7

    Data through 1990 apply to west Germany only

    Changes expressed as percent of GDP in the preceding period

    Table A4.Industrial Countries: Employment, Unemployment, and Real Per Capita GDP
    Average1
    1976-85
    1986198719881989199019911992199319941995
    Growth in employment
    United States2.22.32.62.32.00.5-0.90.61.51.71.0
    Japan1.10.81.01.71.92.01.91.10.20.30.6
    Germany20.21.40.70.81.53.0-2.3-1.7-1.9-1.2
    France0.10.30.81.41.10.1-0.5-1.6-0.21.1
    Italy0.50.8-0.10.70.11.41.4-1.1-4.4-1.30.4
    United Kingdom-0.20.32.34.22.70.4-3.1-2.5-1.00.20.9
    Canada1.92.82.93.22.00.7-1.8-0.81.21.92.8
    Other industrial countries1.71.71.72.21.7-0.4-1.4-1.80.71.5
    All industrial countries1.01.51.71.91.91.3-0.5-0.3-0.40.60.9
    Seven countries above1.21.41.72.01.81.2-0.5-0.1-0.10.60.8
    European Union-0.10.91.11.71.71.6-0.8-1.4-2.1-0.60.7
    West Germany0.21.40.70.81.53.02.60.9-1.6-1.1-0.3
    Unemployment rate
    United States37.57.06.25.55.35.56.77.46.86.36.3
    Japan2.32.82.82.52.32.12.12.22.52.93.0
    Germany25.47.97.97.86.86.26.77.78.99.89.8
    France7.010.410.510.09.48.89.410.111.912.411.9
    Italy48.611.112.012.012.011.010.910.710.411.611.4
    United Kingdom7.111.110.08.06.35.88.19.810.39.49.0
    Canada9.09.58.87.87.58.110.311.311.210.610.0
    Other industrial countries7.310.19.89.48.58.39.010.312.312.712.2
    All industrial countries6.57.87.56.96.36.17.07.78.18.28.1
    Seven countries above6.37.37.06.35.85.76.67.27.37.37.2
    European Union7.611.010.910.29.28.69.110.011.211.811.5
    West Germany5.47.97.97.86.86.25.55.87.38.38.5
    Growth in real per capita GDP
    United States1.92.02.23.01.60.2-1.71.22.02.71.4
    Japan3.32.13.65.84.34.53.90.8-0.20.72.2
    Germany22.32.31.53.12.63.72.11.4-1.81.72.2
    France1.92.11.84.03.82.00.40.8-1.41.52.6
    Italy2.92.83.05.92.82.00.91.10.71.42.7
    United Kingdom1.94.04.54.81.90.1-2.6-0.81.83.12.7
    Canada2.32.32.93.60.7-1.7-3.0-0.51.12.82.7
    Other industrial countries1.72.12.63.53.42.20.30.6-0.41.82.5
    All industrial countries2.22.22.63.82.61.60.80.62.02.1
    Seven countries above2.32.32.63.82.41.50.90.82.12.0
    European Union2.12.72.74.03.12.30.70.8-0.41.82.5
    West Germany2.32.31.53.12.63.73.70.5-2.70.91.4

    Compound annual rate of change for employment and per capita GDP; arithmetic average for unemployment rate.

    Data through 1990 apply to west Germany only.

    The projections for unemployment have been adjusted to reflect the new survey techniques adopted by the U.S. Bureau of Labor Statistics in January 1994. On the old survey basis, the unemployment figures would have been about of ½ of 1 percentage point lower in 1994–95.

    New series starting in 1993, reflecting revisions in the labor force surveys and the definition of unemployment to bring data in line with those of other industrial countries.

    Table A5.Developing Countries: Real GDP(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    Developing countries4.54.85.75.34.23.84.55.96.15.65.6
    By region
    Africa2.42.41.43.93.61.91.40.21.03.34.5
    Asia6.46.78.09.25.75.86.28.28.58.07.3
    Middle East and Europe3.52.56.00.33.74.01.97.04.81.42.5
    Western Hemisphere3.34.13.31.01.60.33.42.53.42.83.3
    Sub-Saharan Africa2.64.22.62.92.60.81.0-0.51.03.15.3
    Four newly industrializing Asian economies8.311.012.29.76.47.27.65.66.17.47.2
    By predominant export
    Fuel3.40.82.91.25.04.23.95.42.82.13.6
    Nonfuel exports4.96.26.56.63.93.74.66.07.16.56.1
    Manufactures6.07.58.18.24.74.25.17.48.67.26.6
    Primary products2.35.13.61.31.21.93.74.74.65.05.2
    Agricultural products2.44.72.81.61.62.64.35.75.25.24.9
    Minerals1.86.25.70.60.1-0.32.01.32.54.66.0
    Services and private transfers5.15.06.33.83.33.54.63.43.24.55.1
    Diversified export base3.51.82.66.43.43.53.21.43.55.55.1
    By financial criteria
    Net creditor countries3.20.21.7-0.46.76.96.39.05.02.73.7
    Net debtor countries4.65.26.05.74.03.64.35.66.25.85.7
    Market borrowers5.25.96.96.13.83.36.17.38.06.96.3
    Diversified borrowers4.24.55.76.04.34.01.44.54.54.34.8
    Official borrowers3.64.13.44.04.13.73.72.82.94.45.0
    Countries with recent debt-servicing difficulties3.13.73.81.92.40.22.12.12.93.03.5
    Countries wilhoul debt-servicing difficulties6.06.47.78.65.15.95.87.98.27.47.0
    Other groups
    Small low-income economies3.84.33.53.33.83.64.43.33.55.16.1
    Least developed countries3.03.42.42.22.82.11.12.02.84.65.4
    Fifteen heavily indebted countries3.14.22.71.92.10.62.51.22.72.73.2
    Memorandum
    Rate per capita GDP
    Developing countries2.02.53.44.70.71.92.53.34.13.63.5
    By region
    Africa-0.40.40.41.10.8-1.0-1.3-2.3-1.60.61.7
    Asia4.44.56.110.51.34.24.56.56.86.35.6
    Middle East and Europe-0.2-0.62.1-3.11.22.2-0.31.9-1.3-0.2
    Western Hemisphere0.91.91.3-0.8-0.7-1.61.40.51.50.80.6
    Table A6.Developing Countries—By Country: Real GDP1
    Average
    1976-85
    19861987198819891990199119921993
    Africa2.42.41.43.93.61.91.40.21.0
    Algeria3.4-0.2-0.7-1.94.9-0.60.22.3-1.8
    Angola-1.61.3-17.6
    Benin4.12.2-1.52.1-2.53.14.73.83.6
    Botswana11.68.212.214.19.27.35.52.74.9
    Burkina Faso2.75.61.35.73.36.00.70.4
    Burundi4.13.35.55.01.33.55.02.7-5.7
    Cameroon7.57.9-3.5-10.50.8-6.9-7.5-5.2-4.4
    Cape Verde4.62.77.67.66.92.42.53.52.3
    Central African Republic2.14.6-2.91.92.31.0-1.6-2.4-3.0
    Chad1.3-3.7-1.813.85.8-2.38.33.9-3.7
    Comoros3.91.91.62.7-1.60.92.11.61.2
    Congo7.9-6.90.21.82.61.02.22.6-1.6
    Côte d’Ivoire3.73.4-1.6-2.0-1.1-2.1-0.8-1.1
    Djibouti1.4-1.20.51.2-0.9-0.61.32.4-2.3
    Equatorial Guinea1.8-2.34.42.7-1.23.3-1.113.07.1
    Ethiopia1.16.99.92.41.2-2.2-1.0-9.88.8
    Gabon-1.0-2.1-15.43.57.04.06.7-2.42.6
    Gambia, The4.14.12.81.74.35.22.34.02.1
    Ghana0.35.24.85.65.13.35.35.95.0
    Guinea2.23.13.36.34.04.52.43.04.5
    Guinea-Bissau7.1-1.05.66.94.53.33.02.83.0
    Kenya4.87.15.96.04.54.32.30.40.8
    Lesotho-0.42.15.112.911.94.61.42.58.2
    Liberia1.0-0.91.33.1-10.80.32.91.92.2
    Madagascar1.92.01.23.44.13.1-6.31.11.9
    Malawi3.5-0.21.63.05.24.87.8-7.712.0
    Mali0.88.41.2-0.211.80.4-2.57.8-0.8
    Mauritania4.25.82.93.12.2-1.82.63.02.5
    Mauritius4.38.510.88.75.74.76.34.76.7
    Morocco4.18.4-2.710.42.53.56.2-4.10.2
    Mozambique. Rep. of-1.00.94.65.55.31.32.6-2.35.6
    Namibia4.73.17.00.71.05.76.4-2.2
    Niger5.64.61.86.90.9-1.32.5-6.51.4
    Nigeria-0.52.5-0.79.97.28.24.83.52.9
    Rwanda3.45.5-0.33.81.00.40.30.4-10.9
    São Tomé and Principe0.51.0-1.52.03.1-2.21.51.51.5
    Senegal2.34.64.05.1-1.44.50.72.9-2.0
    Seychelles4.00.84.94.312.97.6-2.94.25.2
    Sierra Leone-0.11.54.02.52.4-0.10.7-0.81.5
    Somalia2.63.45.1-0.6-0.2-1.5-20.02.55.0
    South Africa2.12.14.22.4-0.3-1.0-2.21.2
    Sudan2.13.91.41.61.6-0.36.08.96.0
    Swaziland3.58.516.910.03.58.83.83.84.1
    Tanzania3.43.36.14.23.03.53.84.55.1
    Togo1.61.60.56.23.90.1-0.9-9.6-13.4
    Tunisia5.4-1.16.70.13.77.83.88.02.2
    Uganda0.81.26.37.86.84.44.33.45.0
    Zaire4.72.70.5-1.4-2.3-7.2-11.2-16.6
    Zambia0.52.72.81.91.00.7-2.0-2.84.0
    Zimbabwe2.62.1-0.57.36.42.24.9-7.72.0
    Asia6.46.78.09.25.75.86.28.28.5
    Afghanistan, I.S. of-1.03.0-10.3-8.3-7.1-2.5-0.62.06.0
    Bangladesh4.84.33.52.74.65.03.84.44.4
    Bhutan6.810.217.81.04.76.63.53.75.2
    Cambodia9.93.51.27.67.05.7
    China7.88.410.911.34.44.38.213.013.4
    Fiji1.66.2-5.92.412.04.80.72.83.3
    Hong Kong8.911.114.58.32.83.24.15.35.5
    India4.64.14.99.75.05.80.84.54.0
    Indonesia5.75.94.95.87.57.26.96.46.5
    Kiribati-5.7-1.30.310.2-2.2-2.92.83.12.9
    Korea8.012.411.811.36.49.59.15.15.5
    Lao P.D. Republic4.74.8-1.02.114.36.74.07.06.5
    Malaysia6.81.25.48.99.29.78.77.88.5
    Maldives7.68.68.98.79.316.27.66.35.4
    Myanmar5.6-1.1-4.0-11.43.72.8-0.79.36.0
    Nepal3.24.33.97.23.98.04.62.14.8
    Pakistan6.16.06.44.84.75.69.34.43.0
    Papua New Guinea0.94.72.82.9-1.4-3.09.511.814.4
    Philippines2.53.44.36.86.22.7-0.50.11.7
    Singapore7.41.89.511.19.28.86.76.09.9
    Solomon Islands6.31.41.75.15.02.23.38.22.6
    Sri Lanka5.24.41.52.72.36.24.64.36.9
    Taiwan Province of China8.611.612.37.37.64.97.26.56.1
    Thailand6.55.59.513.312.211.68.17.67.8
    Vanuatu3.9-2.00.40.64.55.26.50.61.7
    Viet Nam6.43.42.55.17.84.96.08.68.1
    Western Samoa2.75.40.50.32.6-7.4-1.6-1.73.5
    Middle East and Europe3.52.56.00.33.74.01.97.04.8
    Bahrain7.10.5-1.210.91.21.34.67.75.6
    Cyprus8.33.87.08.78.07.31.210.31.3
    Egypt6.44.88.73.52.72.31.20.41.3
    Iran, Islamic Republic of1.2-9.3-2.2-9.74.511.28.64.63.0
    Iraq0.811.928.3-10.212.0-26.0-61.3
    Israel2.83.66.13.11.35.86.26.63.5
    Jordan8.37.72.6-0.5-13.51.71.811.25.8
    Kuwait-2.08.68.1-10.025.0-30.2-47.694.633.6
    Lebanon-8.73.03.03.03.94.24.4
    Libya1.1-15.2-23.6-10.27.210.86.04.0
    Malta5.63.94.18.48.26.36.04.74.2
    Oman8.93.4-3.55.73.07.59.26.87.0
    Qatar-0.43.70.94.75.32.1-0.85.61.5
    Saudi Arabia2.75.7-1.46.60.59.39.92.20.5
    Syrian Arab Republic4.1-4.91.913.3-9.07.611.66.27.4
    Turkey4.08.77.24.4-0.39.21.15.97.3
    United Arab Emirates2.4-19.45.5-2.613.317.50.21.80.4
    Former Yemen Arab Republic8.28.34.46.73.41.7
    Former Yemen. P.D. Rep. or2.5-11.91.41.02.53.0
    Yemen, Republic of-4.27.44.3
    Western Hemisphere3.34.13.31.01.60.33.42.53.4
    Antigua and Barbuda6.49.79.07.76.33.44.31.72.6
    Argentina-0.57.32.6-1.9-6.20.18.98.76.0
    Aruba-0.315.916.79.111.73.83.8
    Bahamas, The5.22.63.22.12.50.9-2.30.31.9
    Barbados2.69.63.83.13.7-3.3-5.2-5.31.3
    Belize3.45.012.69.612.98.04.74.94.2
    Bolivia0.4-2.52.63.02.82.64.12.73.2
    Brazil4.07.63.60.33.3-4.41.1-0.95.0
    Chile3.55.66.67.310.23.06.110.36.0
    Colombia3.85.85.44.13.44.32.13.55.2
    Costa Rica3.05.54.83.45.63.62.27.36.0
    Dominica3.56.86.88.0-1.26.42.22.13.7
    Dominican Republic3.23.27.91.64.1-5.0-0.97.83.0
    Ecuador4.33.1-5.910.40.33.04.93.51.7
    El Salvador-0.40.62.71.61.03.43.55.05.0
    Grenada5.13.57.76.85.06.82.4-1.01.0
    Guatemala2.20.13.54.03.93.13.74.84.0
    Guyana-2.2-0.90.9-2.6-3.3-5.36.07.87.4
    Haiti2.30.60.6-1.5-1.5-3.0-4.0-10.8-4.0
    Honduras4.40.76.14.54.30.13.15.04.0
    Jamaica0.47.07.7-4.04.74.10.81.83.0
    Mexico4.3-3.71.71.23.54.53.62.80.4
    Netherlands Antilles2.6-5.50.22.63.10.65.85.2-1.8
    Nicaragua-1.8-1.0-0.7-12.5-1.7-0.3-0.20.4-0.5
    Panama4.63.42.4-15.6-0.44.69.68.65.9
    Paraguay6.44.36.45.83.12.51.83.7
    Peru1.110.18.38.2-11.8-4.42.7-2.87.0
    St. Kitts and Nevis4.76.27.49.86.73.03.83.65.1
    St. Lucia6.25.82.112.77.43.61.86.33.5
    St. Vincent and the Grenadines6.17.26.38.67.27.13.14.72.2
    Suriname1.7-2.4-13.37.84.22.33.5-0.2
    Trinidad and Tobago-1.7-4.7-4.0-0.91.53.1-1.6-1.0
    Uruguay0.98.97.91.30.92.97.41.7
    Venezuela1.26.53.65.8-8.66.59.76.8-1.0

    For many countries, figures for recent years are IMF staff estimates. Data for some countries are for fiscal years.

    Table A7.Countries in Transition: Real GDP1(Annual percent change)
    Average
    1976-85
    19861987198819891990199119921993
    Central and eastern Europe-11.5-11.7-5.7
    Albania1.05.6-0.8-1.49.8-10.0-27.7-9.711.0
    Belarus-1.2-9.6-11.6
    Bulgaria5.85.65.72.4-0.5-9.1-11.7-5.7-4.2
    Croatia-3.2
    Czech Republic-0.3
    Former Czechoslovakia2.82.82.12.54.5-0.4-15.9-8.5
    Estonia-11.3-17.0-2.1
    Hungary2.71.54.1-0.10.7-3.5-9.9-5.1-2.0
    Latvia-8.3-33.8-11.7
    Lithuania-13.1-37.7-16.5
    Macedonia, Former Yugoslav Rep. of-15.5
    Moldova-18.1-20.6-14.8
    Poland1.84.22.04.10.2-11.6-7.62.63.8
    Romania5.22.30.8-0.5-4.3-7.4-15.1-13.5
    Slovak Republic-4.1
    Slovenia1.0
    Ukraine-11.9-17.0-14.2
    Former Yugoslavia3.13.6-1.0-2.00.8-7.5-17.0-34.0
    Russia-13.0-19.0-12.0
    Transcaucasus and central Asia-8.2-17.3-10.7
    Armenia-11.8-52.4-14.8
    Azerbaijan-0.7-26.8-13.3
    Georgia-20.6-42.7-39.1
    Kazakhstan-13.0-14.0-12.0
    Kyrgyz Republic-5.0-19.1-16.0
    Mongolia6.49.43.55.14.2-2.0-9.9-7.6-1.3
    Tajikistan-8.7-30.0-27.6
    Turkmenistan-4.7-5.3-7.6
    Uzbekistan-0.9-9.6-2.4

    Data for most countries refer to real net material product (NMP) or are estimates based on NMP. For many countries, figures for recent years are IMF staff estimates. The figures should be interpreted only as indicative of broad orders of magnitude because reliable, comparable data are not generally available. In particular, the growth of output of new private enterprises or of the informal economy is not fully reflected in the recent figures.

    Table A8.Summary of Inflation(In percent)
    Average
    1976-85
    1986198719881989199019911992199519941995
    GDP deflators
    Industrial countries7.63.83.23.74.44.44.13.22.52.22.5
    United States6.72.73.13.94.64.33.82.82.22.33.0
    European Union100.05.64.04.34.85.25.64.63.72.92.7
    Japan3.71.80.41.82.22.01.61.00.50.9
    Other industrial countries7.74.65.45.35.74.63.41.71.91.42.3
    Consumer prices
    Industrial countries7.92.73.13.44.45.04.53.32.92.42.6
    United States7.21.93.74.14.85.44.23.03.02.73.4
    European Union9.83.63.23.54.85.35.34.63.83.12.7
    Japan4.70.90.10.72.32.83.31.71.30.70.7
    Other industrial countries7.75.05.34.85.35.95.02.12.51.32.3
    Developing countries25.828.235.355.061.665.636.038.746.247.513.2
    By region
    Africa16.915.416.621.822.217.232.640.632.639.314.3
    Asia7.48.39.213.811.57.58.77.39.710.37.4
    Middle East and Europe20.020.022.425.922.024.624.724.224.727.015.0
    Western Hemisphere67.585.9125.9256.2360.4480.6136.2165.8236.4244.828.5
    By analytical criteria
    Fuel exporters19.026.436.136.718.717.016.917.017.116.011.0
    Nonfuel exporters28.528.835.161.077.784.142.345.855.757.413.8
    Market borrowers39.641.655.697.8122.2131.750.758.777.379.115.9
    Official borrowers18.528.226.735.826.324.435.532.825.927.111.6
    Countries with recent debt-servicing difficulties46.962.383.8147.4181.4226.793.2109.2139.9145.522.8
    Countries without debt-servicing difficulties10.68.19.114.213.79.711.110.812.814.59.1
    Countries in transition4.66.77.510.127.532.497.6730.7687.9330.889.4
    Central and eastern Europe102.6369.9442.3216.977.2
    Excluding Belarus and Ukraine109.7184.7138.087.851.9
    Russia92.71,353.0915.3336.396.5
    Transcaucasus and central Asia98.0841.81,324.11,476.3119.4
    Memorandum
    Median inflation rate
    Industrial countries8.43.64.14.64.85.44.23.13.02.52.6
    Developing countries10.77.17.78.29.810.011.99.47.69.36.7
    Countries in transition0.92.01.30.62.05.6101.4839.6760.9272.043.6
    Table A9.Industrial Countries: GDP Deflators and Consumer Prices(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995Fourth Quarter1
    199319941995
    GDP deflators
    United States6.72.73.13.94.64.33.82.82.22.33.01.83.03.0
    Japan3.71.80.41.82.22.01.61.00.50.91.00.60.8
    Germany23.63.21.81.62.43.24.95.53.92.62.2
    France9.85.23.02.83.03.13.12.32.31.61.82.02.11.6
    Italy15.57.86.06.76.27.67.74.54.43.83.14.33.53.4
    United Kingdom10.83.35.06.07.16.46.54.33.42.43.03.92.13.4
    Canada7.12.44.74.64.83.12.71.41.10.51.80.90.52.0
    Seven countries above7.23.22.93.44.14.14.03.02.32.02.42.12.32.4
    Spain14.711.95.85.77.07.47.06.54.5
    Netherlands4.70.2-0.51.21.22.32.82.51.6
    Belgium5.73.82.41.84.72.72.73.42.9
    Denmark8.24.64.73.44.22.72.51.91.5
    Greece17.917.514.315.512.720.515.014.914.2
    Portugal21.320.511.311.311.714.514.013.06.5
    Ireland12.75.72.23.14.4-1.71.11.33.6
    Luxembourg6.71.1-3.11.00.21.33.83.81.6
    Sweden9.46.94.86.58.08.87.81.32.9
    Switzerland3.53.82.62.44.25.75.52.62.5
    Austria5.04.32.41.72.93.33.94.23.9
    Finland9.04.55.36.96.95.52.30.82.5
    Norway8.5-1.47.24.45.94.62.3-1.02.0
    Iceland30.624.520.223.420.414.37.33.31.0
    Australia9.27.27.48.17.44.71.91.31.2
    New Zealand15.317.114.17.78.04.22.73.82.2
    Other industrial countries9.97.35.25.36.05.95.14.13.43.13.1
    All industrial countries7.63.83.23.74.44.44.13.22.52.22.5
    European Union10.05.64.04.34.85.25.64.63.72.92.7
    West Germany3.63.21.81.62.43.23.94.43.22.42.12.72.61.9
    Consumer prices
    United States7.21.93.74.14.85.44.23.03.02.73.42.73.03.4
    Japan4.70.90.10.72.32.83.31.71.30.70.71.10.70.9
    Germany23.9-0.10.21.32.82.74.64.94.73.12.2
    France10.02.53.32.73.53.43.22.42.11.81.82.12.01.6
    Italy15.35.94.75.06.36.56.35.34.43.83.14.43.52.9
    United Kingdom-310.53.64.14.65.98.16.84.73.02.53.12.72.43.2
    Canada7.84.24.44.05.04.85.61.51.90.21.61.81.8
    Other industrial countries9.36.04.94.75.66.45.44.13.73.23.1
    All industrial countries7.92.73.13.44.45.04.53.32.92.42.6
    Seven countries above7.62.22.93.24.34.84.43.12.82.32.52.62.42.5
    European Union9.83.63.23.54.85.35.34.63.83.12.7
    West Germany3.9-0.10.21.32.82.73.54.04.13.02.13.72.82.0

    From fourth quarter of preceding year.

    Data through 1990 apply to west Germany only.

    Retail price index excluding mortgage interest.

    Table A10.Industrial Countries: Hourly Earnings, Productivity, and Unit Labor Costs in Manufacturing(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    Hourly earnings
    United States7.64.12.24.03.95.25.54.13.71.12.9
    Japan5.52.41.03.26.76.55.94.62.73.12.8
    West Germany6.05.05.23.94.25.77.37.16.13.41.8
    France12.65.14.63.94.84.85.34.22.62.53.0
    Italy17.53.17.67.910.28.59.37.04.53.94.0
    United Kingdom12.78.07.47.99.09.69.36.35.65.15.4
    Canada8.72.93.43.95.35.24.73.52.12.12.1
    Other industrial countries11.57.56.65.96.57.67.55.84.34.14.0
    All industrial countries9.24.63.84.75.66.36.45.03.92.63.2
    Seven countries above8.84.13.44.45.46.06.34.93.82.33.0
    European Union12.25.86.25.86.77.17.96.44.94.03.6
    Productivity
    United States2.02.66.42.40.61.72.13.64.32.32.3
    Japan4.24.17.44.52.81.5-3.7-1.6-0.21.9
    West Germany3.61.01.94.23.33.52.91.32.46.22.3
    France4.43.65.07.35.11.51.34.0-0.62.02.2
    Italy4.2-0.85.46.13.31.61.84.12.92.22.4
    Untied Kingdom3.13.84.95.14.42.22.24.25.24.13.8
    Canada2.6-0.12.40.30.53.50.83.93.52.22.1
    Other industrial countries4.42.02.23.72.40.91.82.12.61.92.0
    All industrial countries3.21.84.74.12.42.01.92.12.62.32.3
    Seven countries above3.01.85.14.22.42.21.92.12.62.32.3
    European Union4.22.03.75.23.61.72.02.82.33.52.5
    Unit labor costs
    United States5.51.5-3.91.63.33.53.30.5-0.6-1.20.6
    Japan1.22.4-3.0-3.92.03.54.38.64.33.20.9
    West Germany2.34.03.3-0.20.92.14.35.73.6-2.6-0.5
    France7.91.5-0.4-3.2-0.33.33.90.23.20.50.8
    Italy12.84.02.11.76.76.87.42.81.61.71.6
    United Kingdom9.34.12.52.74.47.37.02.00.41.01.5
    Canada5.93.00.93.64.91.73.9-0.4-1.3-0.1
    Other industrial countries6.95.44.32.34.06.75.63.71.72.32.0
    All industrial countries5.82.8-0.80.63.14.24.52.91.30.30.9
    Seven countries above5.62.3-1.60.33.03.84.32.71.20.7
    European Union7.83.72.50.63.05.35.83.62.50.51.0
    Table A11.Developing Countries: Consumer Prices(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    Developing countries25.828.235.355.061.665.636.038.746.247.513.2
    By region
    Africa16.915.416.621.822.217.232.640.632.639.314.3
    Asia7.48.39.213.811.57.58.77.39.710.37.4
    Middle East and Europe20.020.022.425.922.024.624.724.224.727.015.0
    Western Hemisphere67.585.9125.9256.2360.4480.6136.2165.8236.4244.828.5
    Sub-Saharan Africa23.619.427.127.427.826.667.475.852.769.817.5
    Four newly industrializing Asian economies9.01.82.65.15.87.17.75.94.65.85.9
    By predominant export
    Fuel19.026.436.136.718.717.016.917.017.116.011.0
    Nonfuel exports28.528.835.161.077.784.142.345.855.757.413.8
    Manufactures26.728.536.868.086.594.243.258.178.480.815.4
    Primary products59.355.562.1123.0173.1186.088.243.330.030.013.5
    Agricultural products60.358.462.9100.9157.2154.562.624.618.416.511.9
    Minerals56.447.159.4205.6228.2312.7201.3128.779.589.918.9
    Services and private transfers10.912.013.912.115.818.219.016.912.711.69.5
    Diversified export base11.911.912.310.59.911.511.89.37.28.27.5
    By financial criteria
    Net creditor countries9.46.99.59.17.15.57.67.68.76.55.4
    Net debtor countries27.330.037.559.066.671.338.441.549.551.013.8
    Market borrowers39.641.655.697.8122.2131.750.758.777.379.115.9
    Diversified borrowers13.912.715.217.015.618.719.717.417.017.510.8
    Official borrowers18.528.226.735.826.324.435.532.825.927.111.6
    Countries with recent debt-servicing difficulties46.962.383.8147.4181.4226.793.2109.2139.9145.522.8
    Countries without debt-servicing difficulties10.68.19.114.213.79.711.110.812.814.59.1
    Other groups
    Small low-income economies18.531.231.834.522.226.042.237.226.329.411.1
    Least developed countries18.318.524.826.029.330.064.968.944.651.818.0
    Fifteen heavily indebted countries60.075.4110.2217.7330.0386.6115.6170.6229.0228.533.8
    Memorandum
    Median
    Developing countries10.77.17.78.29.810.011.99.47.69.36.7
    By region
    Africa11.58.57.07.79.710.010.49.57.615.38.1
    Asia7.95.66.98.27.58.810.78.76.76.66.6
    Middle East and Europe9.56.38.47.010.311.06.85.64.87.76.2
    Western Hemisphere12.411.614.612.114.321.922.712.110.78.55.3
    Table A12.Developing Countries—By Country: Consumer Prices1(Annual percent change)
    Average
    1976-85
    19861987198819891990199119921993
    Africa16.915.416.621.822.217.232.640.632.6
    Algeria10.514.05.95.99.216.725.931.720.5
    Angola80.1253.01,044.0
    Benin9.43.63.24.30.51.12.12.41.0
    Botswana11.210.09.88.411.611.411.816.110.0
    Burkina Faso8.7-0.4-0.43.00.81.23.9-1.91.8
    Burundi10.51.77.14.511.77.09.04.59.7
    Cameroon11.54.32.81.71.61.5-0.62.0-3.9
    Cape Verde13.614.01.74.49.39.87.67.06.8
    Central African Republic11.73.90.8-2.13.91.7-0.42.52.1
    Chad8.5-13.1-2.715.4-4.93.01.7-5.62.1
    Comoros9.78.33.30.34.6-7.4-1.72.41.9
    Congo10.32.51.24.04.12.00.12.10.7
    Côte d’lvoire11.56.87.06.91.0-0.71.64.20.2
    Djibouti9.216.44.26.43.07.86.85.05.8
    Equatorial Guinea21.9-15.7-9.0-3.45.22.7-0.91.51.6
    Ethiopia11.84.9-9.52.29.65.220.921.010.0
    Gabon11.36.4-1.0-9.86.66.01.90.71.2
    Gambia, The11.435.046.212.410.810.29.112.05.9
    Ghana61.824.639.831.425.237.218.010.124.3
    Guinea20.364.736.727.428.319.419.616.67.1
    Guinea-Bissau26.437.086.860.380.833.057.669.647.8
    Kenya13.24.05.18.39.915.719.627.346.1
    Lesotho14.510.011.614.914.415.814.018.812.0
    Liberia6.13.65.09.725.310.010.010.010.0
    Madagascar14.714.515.526.39.011.88.515.313.2
    Malawi10.914.826.831.415.711.511.922.716.6
    Mali12.4-1.2-15.08.5-0.21.61.5-5.9-0.6
    Mauritania4.77.88.26.39.06.45.66.23.3
    Mauritius13.24.30.71.516.010.712.82.98.9
    Morocco9.88.72.72.43.17.08.05.75.2
    Mozambique, Rep. of9.912.2175.855.042.149.233.245.135.0
    Namibia13.412.612.915.112.011.917.78.6
    Niger11.0-3.2-4.3-1.4-2.3-2.0-1.9-1.80.4
    Nigeria17.75.710.259.450.57.413.044.657.2
    Rwanda8.9-1.14.13.01.04.219.69.512.5
    São Tomé and Principe5.413.923.841.244.840.436.127.421.2
    Senegal9.36.1-4.1-1.80.40.3-1.8-0.7
    Seychelles8.70.32.61.81.53.92.01.81.8
    Sierra Leone31.180.9178.732.762.8111.0102.765.519.2
    Somalia33.135.728.181.7110.4140.455.136.324.3
    South Africa13.218.516.212.714.714.415.313.99.7
    Sudan25.423.321.562.965.365.2123.5117.695.0
    Swaziland14.513.213.212.212.913.513.09.08.0
    Tanzania22.132.429.931.225.819.722.322.123.5
    Togo8.74.10.2-1.21.00.51.31.3
    Tunisia8.36.28.27.27.76.57.85.54.2
    Uganda71.4179.6256.0180.161.533.127.754.55.1
    Zaïre55.747.089.882.8104.381.32,153.84,130.01,893.0
    Zambia19.054.847.054.0128.3109.693.4191.3187.3
    Zimbabwe12.214.211.97.111.615.523.942.725.4
    Asia7.48.39.213.811.57.58.77.39.7
    Afghanistan. I.S. of12.0-8.718.229.289.8158.8165.058.234.0
    Bangladesh11.111.09.59.68.79.16.93.21.5
    Bhutan4.56.39.38.110.511.013.712.07.0
    Cambodia90.5152.387.9176.831.0
    China2.96.07.318.517.82.12.95.413.0
    Fiji8.11.85.711.86.18.16.54.95.2
    Hong Kong8.82.95.57.410.19.712.09.38.5
    India5.55.88.27.57.410.013.410.310.0
    Indonesia12.75.99.38.16.48.19.47.69.7
    Kiribati7.56.66.53.15.33.85.74.06.5
    Korea12.12.73.07.15.78.69.36.24.8
    Lao P.D. Republic52.835.06.114.889.735.713.49.86.3
    Malaysia4.60.60.82.52.83.14.44.73.6
    Maldives12.69.111.76.57.23.614.716.820.2
    Myanmar4.514.717.624.023.821.929.122.333.5
    Nepal8.315.913.311.08.19.79.820.88.0
    Pakistan8.03.74.93.37.29.711.79.410.2
    Papua New Guinea6.85.53.15.74.77.57.04.34.5
    Philippines15.90.83.89.110.612.718.78.97.6
    Singapore3.5-1.40.51.52.43.43.52.32.4
    Solomon Islands8.313.111.516.814.98.615.210.39.2
    Sri Lanka10.68.07.714.011.621.512.211.46.9
    Taiwan Province of China6.30.70.51.34.44.23.64.52.9
    Thailand7.31.92.53.95.56.05.74.13.3
    Vanuatu6.74.814.78.47.55.06.54.14.4
    Viet Nam37.0487.2316.7394.035.067.068.117.55.3
    Western Samoa13.95.84.68.56.415.2-1.38.51.7
    Middle Cast and Europe20.020.022.425.922.024.624.724.224.7
    Bahrain8.0-2.5-1.70.21.21.30.82.0
    Cyprus7.51.22.83.43.84.55.06.54.9
    Egypt13.423.919.718.019.319.220.415.710.3
    Iran, Islamic Republic of15.923.727.728.917.49.019.621.627.5
    Iraq15.320.018.015.015.050.050.050.075.0
    Israel118.448.119.916.320.217.219.011.910.9
    Jordan8.5-0.37.725.816.18.24.04.8
    Kuwait5.1-0.617.46.59.113.1-26.41.0-0.6
    Lebanon21.2150.0400.0200.0200.0200.0100.050.050.0
    Libya11.23.34.43.11.36.85.05.06.9
    Malta5.22.00.41.00.93.02.51.64.0
    Oman3.27.12.51.61.39.05.8-0.40.5
    Qatar8.11.64.54.63.33.04.43.03.1
    Saudi Arabia5.9-3.2-1.60.91.02.14.6-0.40.8
    Syrian Arab Republic11.636.059.534.611.419.47.79.511.6
    Turkey43.934.638.873.763.360.366.070.166.6
    United Arab Emirates9.85.55.55.03.30.65.54.13.0
    Former Yemen Arab Republic13.329.120.713.919.414.0
    Former Yemen, P.D. Republic of6.60.82.50.52.1
    Yemen, Republic of44.962.450.0
    Western Hemisphere67.585.9125.9256.2360.4480.6136.2165.8236.4
    Antigua and Barbuda16.70.53.66.83.77.05.73.03.0
    Argentina251.890.1131.3343.03,080.52,314.7171.724.910.6
    Aruba1.13.63.14.05.85.63.95.2
    Bahamas. The6.45.46.14.15.44.67.25.72.7
    Barbados9.40.23.64.76.33.06.36.01.1
    Belize3.80.82.03.22.13.05.62.81.8
    Bolivia188.5276.314.616.015.217.121.412.17.6
    Brazil98.5142.2224.8684.61,319.92,738.8413.7991.12,103.3
    Chile44.519.519.914.717.026.021.815.412.7
    Colombia23.818.923.328.125.929.130.527.022.4
    Costa Rica20.711.816.820.816.519.028.721.89.8
    Dominica10.52.24.72.26.72.06.25.33.6
    Dominican Republic13.09.815.944.445.459.453.94.64.8
    Ecuador19.523.029.558.275.748.448.854.645.0
    El Salvador13.431.925.319.917.624.014.411.218.5
    Grenada13.60.5-4.44.05.62.72.73.82.3
    Guatemala9.736.912.310.811.441.233.210.113.5
    Guyana16.17.928.739.989.763.6101.528.211.3
    Haiti7.98.5-5.12.910.920.619.825.230.7
    Honduras8.34.42.44.69.823.333.98.810.7
    Jamaica19.224.411.28.214.321.951.077.322.1
    Mexico39.686.2131.8114.220.026.722.715.49.8
    Netherlands Antilles6.81.23.82.63.83.73.91.51.9
    Nicaragua37.9681.6911.914,315.84,709.37,484.92,945.123.720.4
    Panama4.7-0.11.00.2-0.20.81.31.80.5
    Paraguay15.231.721.823.026.038.224.915.518.3
    Peru74.562.9114.51,722.32,775.37,649.7409.273.248.6
    St. Kitts and Nevis11.10.90.25.14.24.22.91.8
    St. Lucia8.12.27.00.84.43.86.15.70.8
    St. Vincent and the Grenadines9.91.22.90.32.77.35.93.84.3
    Suriname9.218.753.47.32.719.526.043.6143.5
    Trinidad and Tobago12.77.713.412.19.39.52.38.513.5
    Uruguay51.476.463.662.280.4112.5102.068.554.1
    Venezuela11.111.628.129.484.540.734.231.438.1

    For many countries, figures for recent years are IMF staff estimates. Data for some countries are for fiscal years.

    Table A13.Countries in Transition: Consumer Prices1(Annual percent change)
    Average
    1976-85
    19861987198819891990199119921993
    Central and eastern Europe102.6369.9442.3
    Albania35.5225.985.0
    Belarus83.5969.01,188.0
    Bulgaria1.12.72.72.56.423.9333.582.072.8
    Croatia1,516.4
    Czech Republic20.8
    Former Czechoslovakia1.80.50.10.21.410.859.011.0
    Estonia210.61,069.089.0
    Hungary6.55.38.615.716.929.634.223.022.5
    Latvia124.4951.2109.0
    Lithuania224.71,020.5410.4
    Macedonia, Former Yugoslav Rep. of247.6
    Moldova162.01,276.0688.5
    Poland19.417.825.260.2251.1585.870.343.035.3
    Romania2.90.71.12.60.94.7161.1210.3256.0
    Slovak Republic23.1
    Slovenia32.3
    Ukraine91.21,209.74,734.9
    Former Yugoslavia31.889.8120.8194.11,239.9583.1117.46,146.6
    Russia92.71,353.0915.3
    Transcaucasus and central Asia98.0841.81,324.1
    Armenia100.3824.53,731.8
    Azerbaijan105.6616.1833.4
    Georgia78.5913.03,125.6
    Kazakhstan91.01,381.01,571.0
    Kyrgyz Republic85.0854.61,208.7
    Mongolia0.2208.6321.0183.1
    Tajikistan111.61,156.72,194.8
    Turkmenistan102.5492.93,102.4
    Uzbekistan105.0528.0851.1

    For some countries, figures for recent years are staff estimates. The figures should be interpreted only as indicative of broad orders of magnitude because reliable, comparable data are not generally available.

    Table A14.Summary Financial Indicators(In percent)
    1986198719881989199019911992199319941995
    Industrial countries
    Central government fiscal balance1
    Industrial countries-4.2-3.3-2.7-2.3-2.7-3.1-4.2-4.5-3.9-3.5
    United States-4.7-3.3-2.8-2.3-2.9-3.5-4.7-3.8-2.6-2.5
    European Union-4.7-4.1-3.6-3.3-3.8-4.1-4.9-5.7-5.2-4.5
    Japan-3.2-2.2-1.3-1.2-0.5-0.2-1.6-2.6-3.8-3.9
    Other industrial countries-2.3-1.3-0.8-0.5-1.0-2.9-4.1-5.4-4.5-3.8
    General government fiscal balance1
    Industrial countries-3.4-2.5-1.9-1.3-2.1-2.8-3.8-4.3-3.9-3.5
    United States-3.4-2.5-2.0-1.5-2.5-3.2-4.3-3.4-2.3-2.1
    European Union-4.7-4.2-3.6-2.9-4.1-4.7-5.3-6.5-5.9-5.1
    Japan-0.90.51.52.52.93.01.8-0.6-2.7-2.7
    Other industrial countries-2.5-1.3-0.4-0.6-3.6-5.2-6.1-5.0-4.2
    Growth of broad money
    Industrial countries8.77.58.28.87.84.13.03.6
    United States9.34.35.34.84.02.91.91.4
    European Union7.19.69.910.612.26.55.86.3
    Japan9.210.810.212.07.42.3-0.22.2
    Other industrial countries10.09.810.910.87.13.82.73.8
    Short-term interest rates2
    United States6.05.86.78.17.55.43.43.04.45.5
    Japan5.03.94.04.76.97.04.12.71.92.7
    Germany4.64.04.37.18.49.29.57.25.24.8
    LIBOR6.87.38.19.38.46.13.93.45.06.0
    Developing countries
    Central government fiscal balance1
    Weighted average-6.0-6.0-5.7-4.9-3.4-3.2-3.1-3.5-2.8-2.2
    Median-5.5-5.7-6.2-4.9-4.4-4.5-3.8-4.7-3.9-3.0
    Growth of broad money
    Weighted average32.846.568.281.377.459.066.071.249.016.7
    Median18.216.118.216.517.418.215.313.812.511.5
    Countries in transition
    Central government fiscal balance1,3-2.4-2.3-2.5-2.6-4.8-10.0-9.8-8.1-6.8-4.9
    Growth of broad money10.218.022.232.421.4125.5596.6377.2

    In percent of GDP

    For the United States, three-month treasury bills; for Japan, three-month certificates of deposit; for Germany, three-month interbank deposits; for LIBOR, London interbank offered rate on six-month U.S. dollar deposits

    Because of country differences in definition and coverage, the estimates for this group of countries should be interpreted only as indicative of broad orders of magnitude.

    Table A15.Major Industrial Countries: Central Government Fiscal Balances(In percent of GDP)
    1986198719881989199019911992199319941995
    Fiscal balance
    United States1-4.7-3.3-2.8-2.3-2.9-3.5-4.7-3.8-2.6-2.5
    Japan2-3.2-2.2-1.3-1.2-0.5-0.2-1.6-2.6-3.8-3.9
    Germany3,4-1.2-1.4-1.7-0.9-1.8-1.9-1.3-2.1-2.0-2.0
    France4-2.8-2.2-2.0-1.6-1.4-1.9-3.2-4.5-4.1-3.6
    Italy5-12.1-11.6-11.4-11.1-10.6-10.7-10.9-10.3-9.9-8.3
    United Kingdom6-2.1-1.11.11.2-1.1-2.4-6.9-7.3-6.2-4.7
    Canada6-4.7-3.8-3.2-3.3-3.9-4.6-4.2-4.6-3.8-3.1
    Seven countries above-4.3-3.4-2.7-2.4-2.8-3.1-4.3-4.2-3.7-3.4
    Seven countries except the United States-4.0-3.4-2.7-2.4-2.6-2.8-3.9-4.6-4.7-4.2
    Four European countries-4.3-3.9-3.4-3.0-3.6-4.1-5.2-5.8-5.3-4.5

    Data are on a budget basis.

    Data are on a national income basis and exclude social security transactions.

    Data through June 1990 apply to west Germany only.

    Data are on an administrative basis and exclude social security transactions.

    Data refer to the state sector and cover the transactions of the state budget as well as those of several autonomous entities operating at the same level; data do not include the gross transactions of social security institutions, only their deficits. Includes imputed interest due on tax refund liabilities not replaced by government bonds.

    Data are on a national income accounts basis.

    Table A16.Major Industrial Countries: General Government Fiscal Balances and Impulses1(In percent of GDP)
    1986198719881989199019911992199319941995
    Fiscal balance
    United States-3.4-2.5-2.0-1.5-2.5-3.2-4.3-3.4-2.3-2.1
    Japan-0.90.51.52.52.93.01.8-0.6-2.7-2.7
    Germany2-1.3-1.9-2.10.1-1.9-3.2-2.6-3.2-2.6-2.3
    France3-2.7-1.9-1.6-1.3-1.6-2.2-3.9-5.8-5.5-4.5
    Italy4-11.6-11.3-11.0-10.3-11.4-10.7-10.0-10.0-9.6-8.4
    United Kingdom5-2.4-1.41.00.9-1.2-2.7-6.2-8.1-6.9-5.3
    Canada-5.4-3.8-2.5-2.9-4.1-6.6-7.1-7.1-5.8-4.5
    Seven countries above-3.4-2.5-1.9-1.2-2.0-2.7-3.6-4.0-3.7-3.2
    Seven countries except the United States-3.4-2.6-1.7-0.9-1.7-2.2-3.1-4.6-4.8-4.2
    Four European countries-4.3-4.0-3.3-2.5-3.8-4.6-5.4-6.5-5.9-4.9
    + Expansionary, - contractionary
    Fiscal impulse6
    United States70.5-0.7-0.50.7-0.6-0.5
    Japan7-1.3-0.4-0.9-0.40.51.41.5
    Germany2,70.7-1.80.7-1.5-1.3-0.5
    France7-0.90.70.60.9-0.5-0.5
    Italy-1.00.6-0.41.0-1.1-1.3-1.5-0.8-0.7
    United Kingdom0.4-1.01.11.71.9-0.5-1.1
    Canada-1.1-0.8-0.6-0.4-0.6
    Seven countries above-0.6-0.50.5
    Seven countries except the United States-0.5-0.5
    Four European countries-0.40.6-0.6-0.5
    Memorandum
    Fiscal balance excluding social security transactions
    United States-5.1-4.3-4.2-3.8-4.7-5.2-5.9-5.0-4.5-4.2
    Japan-3.9-2.3-1.6-0.7-0.6-0.7-2.0-4.4-6.4-6.1
    Germany-1.8-2.2-2.2-0.6-2.6-3.9-2.7-3.6-3.0-2.7
    France-2.4-2.1-1.9-1.5-1.6-1.9-3.2-4.5-4.5-3.7
    Italy-7.4-7.2-6.4-5.7-6.1-6.0-5.0-5.4-5.2-4.8
    Canada-4.0-2.2-0.9-1.3-2.4-4.9-5.0-4.9-3.6-2.3

    On a national income accounts basis.

    Data through 1990 apply to west Germany only. The estimate of the fiscal impulse for 1995 is affected by the assumption by the federal government of the debt of the Treuhandanstalt and various other agencies, which were formerly held outside the general government sector. At the public sector level, there would be an estimated withdrawal of fiscal impulse amounting to just over 1 percent of GDP.

    Adjusted for valuation changes of the foreign exchange stabilization fund.

    Includes imputed interest due on tax refund liabilities not replaced by government bonds.

    Excludes asset sales.

    For a definition of the fiscal impulse measure, see The New Palgrave Dictionary of Money and Finance, edited by Peter Newman, Murray Milgate, and John Eatwell (London: Macmillan, 1992; New York: Stockton, 1992). Impulse estimates equal to or less than ±0.3 percent of GDP are indicated by “—”

    For relevant years, the fiscal impulse is calculated on the basis of data adjusted for net international financial transfers related to the 1990–91 regional conflict in the Middle East.

    Table A17.Industrial Countries: Monetary Aggregates

    (Annual percent change)1

    19861987198819891990199119921993
    Narrow money2
    United States15.56.34.30.64.27.914.310.5
    Japan10.44.88.62.44.59.53.97.0
    Germany36.07.410.95.629.63.410.88.5
    France6.94.14.17.73.9-4.7-0.11.7
    Italy7.27.87.310.36.610.50.67.4
    United Kingdom4.04.86.85.75.22.42.44.9
    Canada6.58.27.53.2-1.25.25.413.9
    Other industrial countries9.912.913.49.79.36.56.18.2
    All industrial countries11.46.97.24.07.16.57.98.2
    Seven countries above11.66.16.33.16.76.58.28.2
    European Union6.96.98.67.913.14.04.36.2
    Broad money4
    United States9.34.35.34.84.02.91.91.4
    Japan9.210.810.212.07.42.3-0.22.2
    Germany34.05.96.95.519.76.37.610.9
    France6.69.98.69.48.92.55.2-1.5
    Italy-1.77.27.69.98.19.14.57.7
    United Kingdom16.016.018.118.912.25.63.15.1
    Canada10.98.312.614.38.14.73.23.3
    Other industrial countries10.110.610.110.58.16.24.95.6
    All industrial countries8.77.58.28.87.84.13.03.6
    Seven countries above8.57.17.98.57.73.82.73.3
    European Union7.19.69.910.612.26.55.86.3

    Based on end-of-period data.

    M1 except for the United Kingdom, where M0 is used here as a measure of narrow money; it comprises notes in circulation plus bankers’ operational deposits. M1 is generally currency in circulation plus private demand deposits. In addition, the United States includes traveler’s checks of nonbank issues and other checkable deposits and excludes private sector float and demand deposits of banks. Japan includes government demand deposits and excludes float. Germany includes demand deposits at fixed interest rates. Canada excludes private sector float.

    Data through 1989 apply to west Germany only. The growth rates for the monetary aggregates in 1990 are affected by the extension of the currency area.

    M2, defined as M1 plus quasi-money, except for Japan, Germany, and the United Kingdom, for which the data are based on M2 plus certificates of deposit (CDs), M3, and M4, respectively. Quasi-money is essentially private term deposits and other notice deposits. The United States also includes money market mutual fund balances, money market deposit accounts, overnight repurchase agreements, and overnight Eurodollars issued to U.S. residents by foreign branches of U.S. banks. For Japan, M2 plus CDs is currency in circulation plus total private and public sector deposits and installments of Sogo Banks plus CDs. For Germany, M3 is M1 plus private time deposits with maturities of less than four years plus savings deposits at statutory notice. For the United Kingdom, M4 is composed of non-interest-bearing M1, private sector interest-bearing sterling sight bank deposits, private sector sterling time bank deposits, private sector holdings of sterling bank CDs, private sector holdings of building society shares and deposits, and sterling CDs less building society holdings of bank deposits and bank CDs, and notes and coins.

    Table A18.Industrial Countries: Interest Rates(In percent a year)
    19861987198819891990199119921993August 1994
    Policy-related interest rate1
    United States6.86.77.69.28.15.73.53.04.5
    Japan4.83.53.64.97.27.54.63.02.1
    Germany4.43.73.86.68.08.99.47.44.8
    France7.68.07.59.19.89.510.48.75.3
    Italy11.911.111.212.712.312.714.510.59.2
    United Kingdom10.89.610.313.914.811.59.45.95.2
    Canada9.38.09.211.912.99.06.64.65.4
    Seven countries above7.06.46.98.69.07.86.34.94.4
    Short-term interest rate2
    United States6.56.97.79.18.25.83.73.24.8
    Japan5.04.14.45.37.67.24.32.82.2
    Germany4.64.04.37.18.49.29.57.25.0
    France7.78.27.99.310.39.710.48.45.6
    Italy11.911.111.212.712.312.714.510.59.2
    United Kingdom10.99.710.313.914.811.59.65.95.5
    Canada9.28.49.612.213.09.06.75.05.6
    Other industrial countries10.09.39.010.811.410.710.48.26.2
    All industrial countries7.36.77.18.89.28.06.75.14.8
    Seven countries above6.96.77.28.79.27.86.34.84.6
    European Union8.78.28.210.311.110.711.08.36.3
    Long-term interest rate3
    United States7.78.48.88.58.67.97.05.97.2
    Japan5.35.04.85.17.06.35.14.04.6
    Germany6.16.26.57.08.78.57.96.57.1
    France8.69.49.18.810.09.08.66.97.9
    Italy412.211.612.013.313.613.113.111.311.2
    United Kingdom10.19.69.710.211.810.19.17.58.8
    Canada9.59.910.29.910.89.88.87.99.0
    Other industrial countries10.510.810.311.112.110.810.38.68.1
    All industrial countries8.18.48.58.79.58.78.06.66.9
    Seven countries above7.78.08.18.19.08.37.56.27.1
    European Union9.39.49.29.911.210.410.08.47.9

    For the United States, federal funds rate; for Japan, overnight call rate; for Germany, repurchase rate; for France, day-to-day money rate; for Italy, three-month treasury bill rate; for the United Kingdom, base lending rate; and for Canada, overnight money market financing rate.

    For the United States, three-month certificates of deposit (CDs) in secondary markets; for Japan, from from July 1984, three-month CDs (through June 1984, three-month Gensaki rate); for Germany, France, and the United Kingdom, three-month interbank deposits; for Italy, three-month treasury bills; and for Canada, three-month prime corporate paper.

    For the United States, yield on ten-year treasury bonds; for Japan, over-the-counter sales yield on ten-year government bonds with longest residual maturity; for Germany, yield on government bonds with maturities of nine to ten years; for France, long-term (seven- to ten-year) government bond yield (Emprunts d’Etat à long terme TME); for Italy, secondary market yield on fixed-coupon (BTP) government bonds with two to four years’ residual maturity; for the United Kingdom, yield on medium-dated (ten-year) government stock; and for Canada, average yield on government bonds with residual maturities of over ten years.

    August 1994 data refer to yield on ten-year government bonds.

    Table A19.Developing Countries: Central Government Fiscal Balances(In percent of GDP)
    1986198719881989199019911992199319941995
    Developing countries-6.0-6.0-5.7-4.9-3.4-3.2-3.1-3.5-2.8-2.2
    By region
    Africa-5.1-7.2-7.7-5.1-3.3-3.8-5.5-9.0-5.8-4.4
    Asia-4.2-3.4-3.4-3.3-2.8-2.7-2.6-2.6-2.6-1.6
    Middle East and Europe-13.4-12.2-13.0-9.8-10.6-11.2-7.1-9.4-6.3-6.5
    Western Hemisphere-5.7-6.8-5.4-5.4-0.70.2-0.7-0.1-0.3-0.3
    Sub-Saharan Africa-6.6-9.6-8.2-7.1-7.7-5.9-7.8-8.3-8.0-6.9
    Four newly industrializing Asian economies-0.11.02.51.91.40.50.81.0-0.10.5
    By predominant export
    Fuel-10.2-10.1-10.0-5.5-4.2-4.2-3.0-5.0-2.7-1.9
    Nonfuel exports-4.6-4.7-4.4-4.7-3.1-2.8-3.1-3.1-2.8-2.3
    Manufactures-3.3-3.5-3.0-3.8-1.9-2.1-2.6-2.3-2.1-1.3
    Primary products-4.5-5.6-5.9-6.1-4.2-2.9-3.2-3.1-3.0-2.2
    Agricultural products-4.6-5.1-6.6-7.5-4.5-3.6-4.0-3.3-3.1-2.5
    Minerals-4.3-7.2-3.8-1.7-3.3-1.0-0.4-2.4-2.7-1.4
    Services and private transfers-12.2-11.0-11.0-10.7-11.0-8.6-7.6-7.8-7.9-9.2
    Diversified export base-6.0-4.8-4.9-3.6-2.9-2.8-2.7-4.3-3.7-3.2
    By financial criteria
    Net creditor countries-8.7-8.5-7.4-2.1-6.2-10.5-6.1-7.7-4.4-3.1
    Net debtor countries-5.8-5.8-5.6-5.1-3.2-2.6-2.8-3.2-2.7-2.1
    Market borrowers-4.0-4.3-3.3-3.1-0.6-0.3-1.0-0.8-1.0-0.2
    Diversified borrowers-7.4-6.4-7.3-6.9-5.2-4.8-4.3-5.4-4.5-4.5
    Official borrowers-8.6-9.8-10.1-8.4-8.1-6.5-6.7-8.1-5.8-5.3
    Countries with recent debt-servicing difficulties-7.8-8.8-8.4-7.4-3.7-2.4-2.8-3.4-2.6-2.5
    Countries without debt-servicing difficulties-4.2-3.4-3.4-3.4-2.8-2.8-2.8-3.1-2.8-2.0
    Other groups
    Small low-income economies-7.8-8.7-9.3-7.8-8.0-6.6-7.2-7.3-6.5-5.8
    Least developed countries-8.2-10.6-10.7-8.8-9.3-6.6-8.3-8.6-9.2-9.0
    Fifteen heavily indebted countries-5.4-6.6-5.4-5.1-0.9-0.5-1.5-1.6-0.9-0.8
    Memorandum
    Median
    Developing countries-5.5-5.7-6.2-4.9-4.4-4.5-3.8-4.7-3.9-3.0
    By region
    Africa-6.8-6.9-6.9-6.8-6.0-5.9-5.7-7.0-6.1-5.1
    Asia-5.7-4.5-2.6-3.5-6.2-4.6-3.7-4.2-3.8-3.4
    Middle East and Europe-15.0-11.9-9.1-5.3-5.8-7.2-5.2-7.4-4.8-4.2
    Western Hemisphere-2.2-2.9-4.4-4.2-2.3-2.1-2.0-1.8-0.9-0.9
    Table A20.Developing Countries: Broad Money Aggregates(Annual percent change)
    1986198719881989199019911992199319941995
    Developing countries32.846.568.281/377.459.066.071.249.016.7
    By region
    Africa11.218.124.416.216.826.630.537.727.715.6
    Asia27.024.426.123.720.621.819.319.816.716.4
    Middle East and Europe17.816.418.519.920.224.324.327.424.623.9
    Western Hemisphere69.7142.7288.0456.4442.9224.3289.1299.9157.813.3
    Sub-Saharan Africa25.220.223.123.118.342.753.380.759.225.9
    Four newly industrializing
    Asian economies21.623.220.018.815.819.215.415.513.115.4
    By predominant export
    Fuel17.334.827.023.323.922.720.023.417.817.1
    Nonfuel exports42.052.992.8115.1106.878.393.897.963.616.6
    Manufactures41.857.098.2106.5107.994.6131.0143.191.917.4
    Primary products75.388.5193.3358.8269.086.953.451.230.815.7
    Agricultural products81.194.4198.8372.4223.375.048.237.822.013.4
    Minerals51.663.4170.4305.0502.4135.374.0119.577.927.3
    Services and private transfers23.516.212.618.422.223.624.421.021.221.8
    Diversified export base11.212.519.720.416.514.911.513.39.211.1
    By financial criteria
    Net creditor countries12.714.615.313.715.419.518.520.410.58.4
    Net debtor countries37.153.681.9100.896.170.882.586.858.117.9
    Market borrowers46.981.3127.6176.4168.5106.1130.3134.181.515.2
    Diversified borrowers21.019.626.527.719.125.922.326.025.424.0
    Official borrowers35.635.061.141.741.434.236.440.528.818.7
    Countries with recent debt-servicing difficulties51.993.1170.3237.1233.1142.3180.1190.2106.817.3
    Countries without debt-servicing difficulties23.321.522.522.521.524.823.023.022.318.5
    Other groups
    Small low-income economies60.351.354.245.128.142.247.456.638.421.6
    Least developed countries27.224.830.231.430.547.856.075.850.527.5
    Fifteen heavily indebted countries61.3128.0245.6450.9354.4200.9339.0268.4143.013.4
    Memorandum
    Median
    Developing countries18.216.118.216.517.418.215.313.812.511.5
    By region
    Africa13.413.915.013.411.815.113.511.713.711.7
    Asia17.618.918.419.819.319.815.117.014.814.6
    Middle East and Europe10.59.79.113.014.414.510.77.79.79.9
    Western Hemisphere23.519.522.917.427.530.919.913.810.19.2
    Table A21.Summary of World Trade Volumes and Prices(Annual percent change)
    Average
    1976-85
    1986198719881989199019911992199319941995
    World trade1