- International Monetary Fund
- Published Date:
- October 1999
©1999 International Monetary Fund
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World economic outlook (International Monetary Fund)
World economic outlook: a survey by the staff of the International
Monetary Fund.—1980—Washington, D.C.: The Fund, 1980-
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Has occasional updates, 1984-
ISSN 0258–7440 = World economic and financial surveys
ISSN 0256–6877 = World economic outlook (Washington)
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- Assumptions and Conventions
- Further Information and Data
- Chapter I. World Economic Outlook and the Challenges of Global Adjustment
- Macroeconomic Stability and the Forces of Globalization: Lessons from the 1990s
- The Inevitable U.S. Slowdown and Adjustment
- Japan: Recovery in Sight?
- Securing a Lasting Revival of Growth in Europe
- Emerging Market Economies in Asia and Latin America: Ensuring Sustainable Recoveries
- Middle East and Africa: Varying Responses to Adjustment Pressures
- After a Decade of Transition: Widening Gaps Between Strong and Weak Performers
- Appendix: Year 2000 Contingency Planning
- Chapter II. From Crisis to Recovery in the Emerging Market Economies
- Chapter III. Growth Divergences in the United States, Europe, and Japan: Trend or Cyclical?
- Chapter IV. Safeguarding Macroeconomic Stability at Low Inflation
- Chapter V. Trends and Issues in the Global Trading System
- Chapter VI. Growth in Sub-Saharan Africa: Performance, Impediments, and Policy Requirements
- Annex. Summing Up by the Chairman
- Statistical Appendix
- Data and Conventions
- Classification of Countries
- List of Tables
- Output (Tables 1–7)
- Inflation (Tables 8–13)
- Financial Policies (Tables 14–21)
- Foreign Trade (Tables 22–26)
- Current Account Transactions (Tables 27–32)
- Balance of Payments and External Financing (Tables 33–37)
- External Debt and Debt Service (Tables 38–43)
- Flow of Funds (Table 44)
- Medium-Term Baseline Scenario (Tables 45–46)
- 1.1 Australia and New Zealand: Divergences, Prospects, and Vulnerabilities
- 1.2 Policy Assumptions Underlying the Projections for Selected Advanced Economies
- 1.3 Comparing G-7 Fiscal Positions—Who Has a Debt Problem?
- 1.4 Oil Price Assumptions and the World Economic Outlook
- 1.5 The Regional Economic Impact of the Kosovo Crisis
- 2.1 The Emerging Market Crises and South Africa
- 2.2 Capital Flows to Emerging Market Economies: Composition and Volatility
- 2.3 Structural Reforms in Latin America: The Case of Argentina
- 2.4 Malaysia’s Response to the Financial Crisis: How Unorthodox Was It?
- 2.5 Financial Sector Restructuring in Indonesia, Korea, Malaysia, and Thailand
- 2.6 Counting the Costs of the Recent Crises
- 4.1 The Effects of Downward Rigidity of Nominal Wages on (Un)employment: Selected Simulation Results
- 4.2 The Effects of a Zero Floor for Nominal Interest Rates on Real Output: Selected Simulation Results
- 4.3 Recent Episodes of Negative Inflation
- 4.4 Global Liquidity
- 6.1 Africa and World Trends in Military Spending
- 1.1 Overview of the World Economic Outlook Projections
- 1.2 Selected Economies: Current Account Positions
- 1.3 Advanced Economies: Real GDP, Consumer Prices, and Unemployment
- 1.4 Major Industrial Countries: General Government Fiscal Balances and Debt
- 1.5 Selected Developing Countries: Real GDP and Consumer Prices
- 1.6 Countries in Transition: Real GDP and Consumer Prices
- 1.7 Developing and Transition Economies: Y2K Scenario Results
- 2.1 Gross Private Financing to Emerging Market Economies
- 2.2 Emerging Market Economies: Net Capital Flows
- 2.3 Financial Sector Restructuring
- 2.4 Russian Federation: Macroeconomic Indicators, 1996–99
- 2.5 Countries in Transition: Average Annual Growth Rates in 1994–98, and 1998 GDP Per Capita in U.S. Dollar Purchasing Power Parity Terms
- 2.6 Countries in Transition: Structural Reform Indicators, 1994–98 Averages
- 2.7 Countries in Transition: Indicators of Export Performance and Labor Productivity in Industry, 1994–98 Averages
- 3.1 United States, the Euro Area, and Japan: Estimates of Potential Output Growth
- 3.2 Selected European Economies: General Government Structural Balances and Long-Term Interest Rates
- 3.3 Harder Landing Scenario
- 3.4 Accelerated Adjustment Scenario
- 4.1 Selected Countries: Measurement Bias in the Consumer Price Index
- 4.2 Deflation and Output Growth
- 4.3 Pronounced Changes in Real Equity Prices
- 4.4 Selected Countries: Illustrative Examples of Potential Stock Market Overvaluation (First Quarter, 1999)
- 4.5 Selected Countries: Correlation of Equity Price Inflation and Goods Price Inflation
- 5.1 Intraregional Export Shares, 1990–98
- 6.1 Sub-Saharan Africa and Other Developing Country Groups: Education and Health
- 6.2 Sub-Saharan Africa and Other Developing Country Groups: External Performance
- 6.3 Sub-Saharan Africa and Other Developing Country Groups: Quality of Governance, Institutions, and Public Services
- 6.4 Sub-Saharan Africa and Other Developing Country Groups: Financial and Infrastructure Indicators
- 6.5 Sub-Saharan Africa: Selected Debt Sustainability Indicators
- 1.1 Global Indicators
- 1.2 Financing Conditions for Emerging Markets
- 1.3 Selected European Countries, Japan, and the United States: Indicators of Consumer and Business Confidence
- 1.4 Y2K Interest Rate Spike
- 2.1 Selected Emerging Market Economies: Short-Term Interest Rates
- 2.2 Selected Emerging Market Economies: Bilateral U.S. Dollar Exchange Rates
- 2.3 Emerging Market Economies: Equity Prices
- 2.4 Selected Emerging Market Countries: Eurobond Yield Spreads and Brady Bond Spreads
- 2.5 Selected Emerging Market Economies: Real GDP
- 2.6 Selected Asian and Latin American Economies: Real Effective Exchange Rates
- 2.7 Selected East Asian and Latin American Countries: Bank Credit to the Private Sector and Total External Debt, 1998
- 2.8 Selected East Asian Countries: Progress with Corporate Sector Restructuring
- 3.1 United States, the Euro Area, and Japan: Economic Performance Indicators
- 3.2 United States, the Euro Area, and Japan: Vintages of Potential Output Growth and Output Gaps
- 3.3 United States, the Euro Area, and Japan: Output Per Employee and Per Head of Population
- 3.4 United States: Output, Labor Productivity, and Inflation in Recent Expansions
- 3.5 United States: Policy and Demand Indicators
- 3.6 United States, the Euro Area, and Japan: Changes in WEO Export Market Growth Assumptions
- 3.7 United States: Selected Price Indices
- 3.8 Japan: Policy and Demand Indicators
- 3.9 Euro Area: Policy and Demand Indicators
- 3.10 Euro Area: Economic Performance Indicators
- 3.11 Euro Area: Convergence of Output Per Worker
- 3.12 United States, the Euro Area, and Japan: Household and National Saving Rates
- 4.1 Industrial Countries: Consumer Price Inflation
- 4.2 Hypothetical Distribution of Nominal Wage Increases
- 4.3 Selected Countries: Short-Term Interest Rates
- 4.4 Industrial Countries: Output Gap and Inflation
- 4.5 Comparison of Two Stock Market Crashes
- 4.6 Selected Countries: Stock Prices
- 4.7 Selected Countries: Measures of Stock Market Valuation
- 4.8 Selected Countries: Net Financial Balances
- 5.1 Exports of Goods
- 5.2 Developing Countries and Countries in Transition: Average Annual Growth of Exports, 1988–98
- 5.3 World Merchandise and Services Exports
- 6.1 Sub-Saharan Africa and Other Developing Country Groups: Growth, Investment, and Saving
- 6.2 Sub-Saharan Africa and Other Developing Country Groups: Inflation and Fiscal Balance
- World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics, 1992–99
Assumptions and Conventions
A number of assumptions have been adopted for the projections presented in the World Economic Outlook. It has been assumed that real effective exchange rates will remain constant at their average levels during July 26–August 16, 1999 except for the bilateral rates among the European exchange rate mechanism (ERM) currencies, which are assumed to remain constant in nominal terms; that established policies of national authorities will be maintained (for specific assumptions about fiscal and monetary polices in industrial countries, see Box 1.2); that the average price of oil will be $16.70 a barrel in 1999 and $18.00 a barrel in 2000, and remain unchanged in real terms over the medium term; and that the six-month London interbank offered rate (LIBOR) on U.S. dollar deposits will average 5.4 percent in 1999 and 6.1 percent in 2000. These are, of course, working hypotheses rather than forecasts, and the uncertainties surrounding them add to the margin of error that would in any event be involved in the projections. The estimates and projections are based on statistical information available in early September 1999.
The following conventions have been used throughout the World Economic Outlook:
- … to indicate that data are not available or not applicable;
- — to indicate that the figure is zero or negligible;
- — between years or months (for example, 1997–98 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
- – between years or months (for example, 1997/98) to indicate a fiscal or financial year.
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
In figures and tables, shaded areas indicate IMF staff projections.
Minor discrepancies between sums of constituent figures and totals shown are due to rounding.
As used in this report, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
Further Information and Data
This report on the World Economic Outlook is available in full on the IMF’s Internet site, www.imf.org. Accompanying it on the website is a larger compilation of data from the WEO database than in the report itself, consisting of files containing the series most frequently requested by readers. These files may be downloaded for use in a variety of software packages.
Inquiries about the content of the World Economic Outlook and the WEO database should be sent by mail, electronic mail, or telefax (telephone inquiries cannot be accepted) to:
World Economic Studies Division
International Monetary Fund
700 19th Street, N.W.
Washington, D.C. 20431, U.S.A.
E-mail: email@example.com Telefax: (202) 623-6343
The projections and analysis contained in the World Economic Outlook are an integral element of the IMF’s ongoing surveillance of economic developments and policies in its member countries and of the global economic system. The IMF has published the World Economic Outlook annually from 1980 through 1983 and biannually since 1984.
The survey of prospects and policies is the product of a comprehensive interdepartmental review of world economic developments, which draws primarily on information the IMF staff gathers through its consultations with member countries. These consultations are carried out in particular by the IMF’s area departments together with the Policy Development and Review Department and the Fiscal Affairs Department.
The country projections are prepared by the IMF’s area departments on the basis of internationally consistent assumptions about world activity, exchange rates, and conditions in international financial and commodity markets. For approximately 50 of the largest economies—accounting for 90 percent of world output—the projections are updated for each World Economic Outlook exercise. For smaller countries, the projections are based on those prepared at the time of the IMF’s regular Article IV consultations with those countries or in connection with the use of IMF resources; for these countries, the projections used in the World Economic Outlook are incrementally adjusted to reflect changes in assumptions and global economic conditions.
The analysis in the World Economic Outlook draws extensively on the ongoing work of the IMF’s area and specialized departments, and is coordinated in the Research Department under the general direction of Michael Mussa, Economic Counsellor and Director of Research. The World Economic Outlook project is directed by Flemming Larsen, Deputy Director of the Research Department, together with Graham Hacche, Assistant Director for the World Economic Studies Division.
Primary contributors to the current issue include Francesco Caramazza, John H. Green, Maitland MacFarlan, Peter Sturm, Luis Catão, Mark De Broeck, Luca Ricci, Ranil Salgado, Cathy Wright, and Harm Zebregs; and Robert Sharer, Marc Auboin, and Bradley McDonald of the Trade Policy Division of the Policy Development and Review Department who prepared Chapter V. Other contributors include Sanjeev Gupta, Richard Hemming, Kalpana Kochhar, Arvind Subramanian, Steven Symansky, Subhash Thakur, and Andrew Tweedie. The Fiscal Analysis Division of the Fiscal Affairs Department computed the structural budget and fiscal impulse measures. Gretchen Byrne, Mandy Hemmati, Yutong Li, and Anthony G. Turner provided research assistance. Allen Cobler, Nicholas Dopuch, Isabella Dymarskia, Yasoma Liyanarchchi, Olga Plagie, and Irim Siddiqui processed the data and managed the computer systems. Susan Duff, Caroline Bagworth, and Lisa Nugent were responsible for word processing. James McEuen of the External Relations Department edited the manuscript and coordinated production of the publication.
The analysis has benefited from comments and suggestions by staff from other IMF departments, as well as by Executive Directors following their discussion of the World Economic Outlook on September 1 and 3, 1999 (see Annex). However, both projections and policy considerations are those of the IMF staff and should not be attributed to Executive Directors or to their national authorities.