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International Monetary Fund. Research Dept.
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WEO; emerging market; U.S. dollar; commodity exporter; debtor economy; advanced economy; product market reform; Emerging and frontier financial markets; Oil prices; Capital inflows; Commodity markets; Global; Middle East; North Africa; Sub-Saharan Africa; Europe; Asia and Pacific; commodity price; oil price; trade balance
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Abstract

The Statistical Appendix presents historical data as well as projections. It comprises seven sections: Assumptions, What’s New, Data and Conventions, Country Notes, Classification of Countries, Key Data Documentation, and Statistical Tables.

Statistical Appendix

The Statistical Appendix presents historical data as well as projections. It comprises seven sections: Assumptions, What’s New, Data and Conventions, Country Notes, Classification of Countries, Key Data Documentation, and Statistical Tables.

The assumptions underlying the estimates and projections for 2016–17 and the medium-term scenario for 2018–21 are summarized in the first section. The second section presents a brief description of the changes to the database and statistical tables since the October 2015 World Economic Outlook (WEO). The third section provides a general description of the data and the conventions used for calculating country group composites. The fourth section summarizes selected key information for each country. The classification of countries in the various groups presented in the WEO is summarized in the fifth section. The sixth section provides information on methods and reporting standards for the member countries’ national account and government finance indicators included in the report.

The last, and main, section comprises the statistical tables. (Statistical Appendix A is included here; Statistical Appendix B is available online.) Data in these tables have been compiled on the basis of information available through March 25, 2016. The figures for 2016 and beyond are shown with the same degree of precision as the historical figures solely for convenience; because they are projections, the same degree of accuracy is not to be inferred.

Assumptions

Real effective exchange rates for the advanced economies are assumed to remain constant at their average levels measured during the period February 2 to March 1, 2016. For 2016 and 2017, these assumptions imply average U.S. dollar/special drawing right (SDR) conversion rates of 1.395 and 1.400, U.S. dollar/euro conversion rates of 1.111 and 1.119, and yen/U.S. dollar conversion rates of 114.8 and 113.3, respectively.

It is assumed that the price of oil will average $34.75 a barrel in 2016 and $40.99 a barrel in 2017.

Established policies of national authorities are assumed to be maintained. The more specific policy assumptions underlying the projections for selected economies are described in Box A1.

With regard to interest rates, it is assumed that the London interbank offered rate (LIBOR) on six-month U.S. dollar deposits will average 0.9 percent in 2016 and 1.5 percent in 2017, that three-month euro deposits will average −0.3 percent in 2016 and −0.4 percent in 2017, and that six-month yen deposits will average −0.1 percent in 2016 and −0.3 percent in 2017.

As a reminder, with respect to introduction of the euro, on December 31, 1998, the Council of the European Union decided that, effective January 1, 1999, the irrevocably fixed conversion rates between the euro and currencies of the member countries adopting the euro are as follows:

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Established on January 1, 2008.

Established on January 1, 2011.

Established on January 1, 2001.

Established on January 1, 2014.

Established on January 1, 2015.

Established on January 1, 2009.

Established on January 1, 2007.

See Box 5.4 of the October 1998 WEO for details on how the conversion rates were established.

What’s New

  • Data for Macao Special Administrative Region and the Commonwealth of Puerto Rico are included in data aggregated for the advanced economies. Macao is a Special Administrative Region of China, and Puerto Rico is a territory of the United States, but the WEO maintains statistical data for both economies on a separate and independent basis.

  • Argentina’s and Venezuela’s consumer prices are excluded from all the WEO groups’ aggregates.

Data and Conventions

Data and projections for 191 economies form the statistical basis of the WEO database. The data are maintained jointly by the IMF’s Research Department and regional departments, with the latter regularly updating country projections based on consistent global assumptions.

Although national statistical agencies are the ultimate providers of historical data and definitions, international organizations are also involved in statistical issues, with the objective of harmonizing methodologies for the compilation of national statistics, including analytical frameworks, concepts, definitions, classifications, and valuation procedures used in the production of economic statistics. The WEO database reflects information from both national source agencies and international organizations.

Most countries’ macroeconomic data presented in the WEO conform broadly to the 1993 version of the System of National Accounts (SNA). The IMF’s sector statistical standards—the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), the Monetary and Financial Statistics Manual (MFSM 2000), and the Government Finance Statistics Manual 2001 (GFSM 2001)—have been or are being aligned with the SNA 2008.1 These standards reflect the IMF’s special interest in countries’ external positions, financial sector stability, and public sector fiscal positions. The process of adapting country data to the new standards begins in earnest when the manuals are released. However, full concordance with the manuals is ultimately dependent on the provision by national statistical compilers of revised country data; hence, the WEO estimates are only partially adapted to these manuals. Nonetheless, for many countries the impact, on major balances and aggregates, of conversion to the updated standards will be small. Many other countries have partially adopted the latest standards and will continue implementation over a period of years.

Composite data for country groups in the WEO are either sums or weighted averages of data for individual countries. Unless noted otherwise, multiyear averages of growth rates are expressed as compound annual rates of change.2 Arithmetically weighted averages are used for all data for the emerging market and developing economies group except data on inflation and money growth, for which geometric averages are used. The following conventions apply:

  • Country group composites for exchange rates, interest rates, and growth rates 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 group GDP.

  • Composites for other data relating to the domestic economy, whether growth rates or ratios, are weighted by GDP valued at purchasing power parity as a share of total world or group GDP.3

  • Unless noted otherwise, composites for all sectors for the euro area are corrected for reporting discrepancies in intra-area transactions. Annual data are not adjusted for calendar-day effects. For data prior to 1999, data aggregations apply 1995 European currency unit exchange rates.

  • Composites for fiscal data are sums of individual country data after conversion to U.S. dollars at the average market exchange rates in the years indicated.

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

  • Composites relating to external sector statistics are sums of individual country data after conversion to U.S. dollars at the average market exchange rates in the years indicated for balance of payments data and at end-of-year market exchange rates for debt denominated in currencies other than U.S. dollars.

  • Composites of changes in foreign trade volumes and prices, however, are arithmetic averages of percent 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).

  • Unless noted otherwise, group composites are computed if 90 percent or more of the share of group weights is represented.

  • Data refer to calendar years, except in the case of a few countries that use fiscal years. Please refer to Table F, which lists the economies with exceptional reporting periods for national accounts and government finance data for each country.

For some countries, the figures for 2015 and earlier are based on estimates rather than actual outturns. Please refer to Table G, which lists the latest actual outturns for the indicators in the national accounts, prices, government finance, and balance of payments indicators for each country.

Country Notes

  • The GDP data for Argentina before 2015 reflect official data, while for 2015 the data reflect IMF staff estimates. On February 1, 2013, the IMF issued a declaration of censure, and in June 2015 called on Argentina to implement additional specified actions to address the quality of its official GDP data according to a specified timetable. The new government that took office in December 2015 has announced its determination to improve the quality of GDP statistics. The Managing Director will report to the Executive Board on this issue again by July 15, 2016. At that time, the Executive Board will review the issue in line with IMF procedures.

  • The consumer price data for Argentina before December 2013 reflect the CPI for the Greater Buenos Aires Area (CPI-GBA), while from December 2013 to October 2015 the data reflect the national CPI (IPCNu). Given the differences in geographical coverage, weights, sampling, and methodology of the two series and the authorities’ decision in December 2015 to discontinue the IPCNu, the average CPI inflation for 2014, 2015, and 2016 and end-period inflation for 2015 are not reported in the April 2016 World Economic Outlook. On February 1, 2013, the IMF issued a declaration of censure and in June 2015 called on Argentina to implement additional specified actions to address the quality of its official CPI data according to a specified timetable. The new government that took office in December 2015 has stated that it considers that the IPCNu is flawed and announced its determination to discontinue it and to improve the quality of CPI statistics. It has temporarily suspended the publication of CPI data to review sources and methodology. The Managing Director will report to the Executive Board on this issue again by July 15, 2016. At that time, the Executive Board will review the issue in line with IMF procedures.

  • The series from which the nominal exchange rate assumptions are calculated are not made public for Egypt because the nominal exchange rate is a market-sensitive issue in Egypt.

  • The 2015 data for Greece are preliminary. Fiscal projections for 2016–21 are not available at this time, given ongoing negotiations with the authorities and European partners on the fiscal targets in a potential new adjustment program.

  • Because of the ongoing IMF program with Pakistan, the series from which nominal exchange rate assumptions are calculated are not made public—the nominal exchange rate is a market-sensitive issue in Pakistan.

  • Data for Syria are excluded from 2011 onward because of the uncertain political situation.

  • Projecting the economic outlook in Venezuela is complicated by the lack of any Article IV consultation since 2004 and delays in the publication of key economic data.

Classification of Countries

Summary of the Country Classification

The country classification in the WEO divides the world into two major groups: advanced economies and emerging market and developing economies.4 This classification is not based on strict criteria, economic or otherwise, and it has evolved over time. The objective is to facilitate analysis by providing a reasonably meaningful method of organizing data. Table A provides an overview of the country classification, showing the number of countries in each group by region and summarizing some key indicators of their relative size (GDP valued by purchasing power parity, total exports of goods and services, and population).

Some countries remain outside the country classification and therefore are not included in the analysis. Anguilla, Cuba, the Democratic People’s Republic of Korea, and Montserrat are examples of countries that are not IMF members, and their economies therefore are not monitored by the IMF. Somalia is omitted from the emerging market and developing economies group composites because of data limitations.

General Features and Composition of Groups in the World Economic Outlook Classification

Advanced Economies

The 39 advanced economies are listed in Table B. The seven largest in terms of GDP based on market exchange rates—the United States, Japan, Germany, France, Italy, the United Kingdom, and Canada—constitute the subgroup of major advanced economies often referred to as the Group of Seven (G7). The members of the euro area are also distinguished as a subgroup. Composite data shown in the tables for the euro area cover the current members for all years, even though the membership has increased over time.

Table C lists the member countries of the European Union, not all of which are classified as advanced economies in the WEO.

Emerging Market and Developing Economies

The group of emerging market and developing economies (152) includes all those that are not classified as advanced economies.

The regional breakdowns of emerging market and developing economies are Commonwealth of Independent States (CIS), emerging and developing Asia, emerging and developing Europe (sometimes also referred to as “central and eastern Europe”), Latin America and the Caribbean (LAC), Middle East, North Africa, Afghanistan, and Pakistan (MENAP), and sub-Saharan Africa (SSA).

Emerging market and developing economies are also classified according to analytical criteria. The analytical criteria reflect the composition of export earnings and a distinction between net creditor and net debtor economies. The detailed composition of emerging market and developing economies in the regional and analytical groups is shown in Tables D and E.

The analytical criterion source of export earnings distinguishes between categories fuel (Standard International Trade Classification [SITC] 3) and nonfuel and then focuses on nonfuel primary products (SITCs 0, 1, 2, 4, and 68). Economies are categorized into one of these groups when their main source of export earnings exceeded 50 percent of total exports on average between 2010 and 2014.

The financial criteria focus on net creditor economies, net debtor economies, heavily indebted poor countries (HIPCs), and low-income developing countries (LIDCs). Economies are categorized as net debtors when their latest net international investment position, where available, was less than zero or their current account balance accumulations from 1972 (or earliest available data) to 2014 were negative. Net debtor economies are further differentiated on the basis of experience with debt servicing.5

The HIPC group comprises the countries that are or have been considered by the IMF and the World Bank for participation in their debt initiative known as the HIPC Initiative, which aims to reduce the external debt burdens of all the eligible HIPCs to a “sustainable” level in a reasonably short period of time.6 Many of these countries have already benefited from debt relief and have graduated from the initiative.

The LIDCs are countries that were designated as eligible to use the IMF’s concessional financing resources under the Poverty Reduction and Growth Trust (PRGT) in the 2013 PRGT eligibility review and had a level of per capita gross national income less than the PRGT income graduation threshold for non–small states (that is, twice the World Bank International Development Association operational threshold, or US$2,390 in 2011 as measured by the World Bank’s Atlas method) and Zimbabwe.

Table A.

Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 20151

(Percent of total for group or world)

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The GDP shares are based on the purchasing-power-parity valuation of economies’ GDP. The number of economies comprising each group reflects those for which data are included in the group aggregates.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Syria is omitted from the source of export earnings and South Sudan is omitted from the net external position group composites because of insufficient data.

Table B.

Advanced Economies by Subgroup

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On July 1, 1997, Hong Kong was returned to the People’s Republic of China and became a Special Administrative Region of China.

On December 20, 1999, Macao was returned to the People’s Republic of China and became a Special Administrative Region of China.

Table C.

European Union

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Table D.

Emerging Market and Developing Economies by Region and Main Source of Export Earnings

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Turkmenistan, which is not a member of the Commonwealth of Independent States, is included in this group for reasons of geography and similarity in economic structure.

Table E.

Emerging Market and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries and Low-Income Developing Countries

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Dot (star) indicates that the country is a net creditor (net debtor).

Dot instead of star indicates that the country has reached the completion point.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

South Sudan is omitted from the net external position group composite for lack of a fully developed database.

Table F.

Economies with Exceptional Reporting Periods1

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Unless noted otherwise, all data refer to calendar years.

Table G.

Key Data Documentation

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Note: BPM = Balance of Payments Manual (number following abbreviation signifies edition); CPI = consumer price index; ESA = European System of National and Regional Accounts; SNA = System of National Accounts.

CB = Central Bank; FEO = Foreign Exchange Office; GAD = General Administration Department; IEO = International Economic Organization; MEP = Ministry of Economy, Planning, Commerce, and/or Development; MoF = Ministry of Finance and/or Treasury; NESDB = National Economic and Social Development Board; NSO = National Statistics Office; PFTAC = Pacific Financial Technical Assistance Centre; PMO = Prime Minister’s Office; SAFE = State Administration of Foreign Exchange.

National accounts base year is the period with which other periods are compared and the period for which prices appear in the denominators of the price relationships used to calculate the index.

Use of chain-weighted methodology allows countries to measure GDP growth more accurately by reducing or eliminating the downward biases in volume series built on index numbers that average volume components using weights from a year in the moderately distant past.

For some countries, the structures of government consist of a broader coverage than specified for the general government. Coverage: BCG = Budgetary Central Government; CG = Central Government; EUA = Extrabudgetary Units/Accounts; LG = Local Government; MPC = Monetary Public Corporation, including Central Bank; NMPC = Nonmonetary Financial Public Corporations; NFPC = Nonfinancial Public Corporations; SG = State Government; SS = Social Security Funds; TG = Territorial Governments.

Accounting Standard: A = Accrual; C = Cash.

Nominal GDP is not measured in the same way as real GDP.

Economic Policy Assumptions Underlying the Projections for Selected Economies

Fiscal Policy Assumptions

The short-term fiscal policy assumptions used in the World Economic Outlook (WEO) are based on officially announced budgets, adjusted for differences between the national authorities and the IMF staff regarding macro-economic assumptions and projected fiscal outturns. The medium-term fiscal projections incorporate policy measures that are judged likely to be implemented. For cases in which the IMF staff has insufficient information to assess the authorities’ budget intentions and prospects for policy implementation, an unchanged structural primary balance is assumed unless indicated otherwise. Specific assumptions used in regard to some of the advanced economies follow. (See also Tables B5 to B9 in the online section of the Statistical Appendix for data on fiscal net lending/borrowing and structural balances.)1

Argentina: Fiscal projections are based on the available information regarding budget outturn for the federal government, fiscal measures announced by the authorities, and budget plans for provinces and on IMF staff macroeconomic projections.

Australia: Fiscal projections are based on Australian Bureau of Statistics data, the Mid-Year Economic and Fiscal Outlook 2015–16, and IMF staff estimates.

Austria: For 2014, the creation of a defeasance structure for Hypo Alpe Adria is assumed to increase the general-government-debt-to-GDP ratio by 4.2 percentage points, and the deficit effect arising from Hypo is assumed to be 1.4 percentage points.

Belgium: Projections reflect the IMF staff’s assessment of policies and measures laid out in the 2016 budget and the 2015–18 Stability Programme, incorporated into the IMF staff’s macroeconomic framework.

Brazil: For 2015, outturn estimates are based on the information available as of January 2016. Projections for 2016 take into account budget performance through December 31, 2015, and the 2016 budget law approved by Congress on December 18, 2015. Projections do not include the revised target or the fiscal measures announced by the government on February 19, 2016.

Canada: Projections use the baseline forecasts in the Update of Economic and Fiscal Projections 2015 (November 2015), Backgrounder: Canadian Economic Outlook (February 2016), 2015 provincial budget updates, and 2016 provincial budgets as available. The IMF staff makes adjustments to these forecasts for differences in macroeconomic projections. The IMF staff forecast also incorporates the most recent data releases from Statistics Canada’s Canadian System of National Economic Accounts, including federal, provincial, and territorial budgetary outturns through the end of 2015.

Chile: Projections are based on the authorities’ budget projections, adjusted to reflect the IMF staff’s projections for GDP and copper prices.

China: The pace of fiscal consolidation is likely to be more gradual, reflecting reforms to strengthen social safety nets and the social security system announced as part of the Third Plenum reform agenda.

Denmark: Projections for 2014–15 are aligned with the latest official budget estimates and the underlying economic projections, adjusted where appropriate for the IMF staff’s macroeconomic assumptions. For 2016–20, the projections incorporate key features of the medium-term fiscal plan as embodied in the authorities’ 2014 Convergence Programme submitted to the European Union (EU).

France: Projections for 2016 reflect the budget law. For 2017–18, they are based on the multiyear budget and the April 2015 Stability Programme, adjusted for differences in assumptions on macro and financial variables, and revenue projections. Historical fiscal data reflect the statistical institute’s May 2015 revision and update of the fiscal accounts and national accounts.

Germany: The IMF staff’s projections for 2016 and beyond reflect the authorities’ adopted core federal government budget plan and the German Stability Programme: 2015 Update, adjusted for the differences in the IMF staff’s macroeconomic framework. The estimate of gross debt includes portfolios of impaired assets and noncore business transferred to institutions that are winding up, as well as other financial sector and EU support operations.

Greece: For 2015, data reflect the IMF staff’s preliminary estimates of the fiscal outturn, which are subject to revision, given high uncertainty regarding potentially significant accrual adjustments. Fiscal projections are not available at this time, given ongoing negotiations with the authorities and European partners on the fiscal targets and underlying fiscal measures that could be included in a potential new adjustment program.

Hong Kong SAR: Projections are based on the authorities’ medium-term fiscal projections on expenditures.

Hungary: Fiscal projections include IMF staff projections of the macroeconomic framework and of the impact of recent legislative measures, as well as fiscal policy plans announced in the 2016 budget.

India: Historical data are based on budgetary execution data. Projections are based on available information on the authorities’ fiscal plans, with adjustments for IMF staff assumptions. Subnational data are incorporated with a lag of up to two years; general government data are thus finalized well after central government data. IMF and Indian presentations differ, particularly regarding divestment and license auction proceeds, net versus gross recording of revenues in certain minor categories, and some public sector lending.

Indonesia: IMF projections are based on moderate tax policy and administration reforms, fuel subsidy pricing reforms introduced in January 2015, and a gradual increase in social and capital spending over the medium term in line with fiscal space.

Ireland: Fiscal projections are based on the 2015 budget, adjusted for differences between the IMF staff’s macroeconomic projections and those of the Irish authorities.

Italy: IMF staff estimates and projections are based on the fiscal plans included in the government’s 2016 budget. Estimates of the cyclically adjusted balance include the expenditures to clear capital arrears in 2013, which are excluded from the structural balance. After 2016, the IMF staff projects convergence to a structural balance in line with Italy’s fiscal rule, which implies corrective measures in some years, as yet unidentified.

Japan: The projections include fiscal measures already announced by the government, including the consumption tax increase with a reduced rate in April 2017, earthquake reconstruction spending, and the stimulus package.

Korea: The medium-term forecast incorporates the government’s announced medium-term consolidation path.

Mexico: Fiscal projections for 2015 are broadly in line with the approved budget; projections for 2016 onward assume compliance with rules established in the Fiscal Responsibility Law.

Netherlands: Fiscal projections for the period 2016–21 are based on the authorities’ Bureau for Economic Policy Analysis budget projections, after differences in macroeconomic assumptions are adjusted for. Historical data were revised following the June 2014 Central Bureau of Statistics release of revised macro data because of the adoption of the European System of National and Regional Accounts (ESA 2010) and the revisions of data sources.

New Zealand: Fiscal projections are based on the authorities’ 2015 Half Year Economic and Fiscal Update and on IMF staff estimates.

Portugal: The estimate for 2015 reflects the cash outturn and January through September data on a national accounts basis; the projection for 2016 reflects the authorities’ draft budget and the IMF staff’s macroeconomic forecast. Projections thereafter are based on the assumption of unchanged policies.

Russia: Projections for 2016–18 are IMF staff estimates. Projections for 2019–21 are based on the oil-price-based fiscal rule introduced in December 2012, with adjustments by the IMF staff.

Saudi Arabia: IMF staff projections of oil revenues are based on WEO baseline oil prices. On the expenditure side, wage bill estimates incorporate 13th-month pay awards every three years in accordance with the lunar calendar. Expenditure projections take the 2016 budget as a starting point and assume that, to adjust to lower oil prices, capital spending falls as a percentage of GDP over the medium term.

Singapore: For fiscal years 2014/15 and 2015/16, projections are based on budget numbers. For the remainder of the projection period, the IMF staff assumes unchanged policies.

South Africa: Fiscal projections are based on the authorities’ 2016 Budget Review.

Spain: For 2015 and beyond, fiscal projections are based on the measures specified in the Stability Programme Update 2015–18, other measures included in the 2016 budget approved in October 2015, and the 2015 budget approved in December 2014.

Sweden: Fiscal projections take into account the authorities’ projections based on the Budget Bill for 2016. The impact of cyclical developments on the fiscal accounts is calculated using the Organisation for Economic Co-operation and Development’s 2005 elasticity to take into account output and employment gaps.

Switzerland: The projections assume that fiscal policy is adjusted as necessary to keep fiscal balances in line with the requirements of Switzerland’s fiscal rules.

Turkey: Fiscal projections assume that both current and capital spending will be in line with the authorities’ 2014–16 Medium Term Programme based on current trends and policies.

United Kingdom: Fiscal projections are based on the 2016 budget, published in March 2016. However, on the revenue side, the authorities’ projections are adjusted for differences between IMF staff forecasts of macroeconomic variables (such as GDP growth) and the forecasts of these variables assumed in the authorities’ fiscal projections. IMF staff data exclude public sector banks and the effect of transferring assets from the Royal Mail Pension Plan to the public sector in April 2012. Real government consumption and investment are part of the real GDP path, which, according to the IMF staff, may or may not be the same as projected by the U.K. Office for Budget Responsibility.

United States: Fiscal projections are based on the January 2016 Congressional Budget Office baseline adjusted for the IMF staff’s policy and macroeconomic assumptions. The baseline incorporates the key provisions of the Bipartisan Budget Act of 2015, including a partial rollback of the sequester spending cuts in fiscal year 2016. In fiscal years 2017 through 2021, the IMF staff assumes that the sequester cuts will continue to be partially replaced, in proportions similar to those already implemented in fiscal years 2014 and 2015, with back-loaded measures generating savings in mandatory programs and additional revenues. Projections also incorporate the Protecting Americans from Tax Hikes Act of 2015, which extended some existing tax cuts for the short term and some permanently. Finally, fiscal projections are adjusted to reflect the IMF staff’s forecasts for key macroeconomic and financial variables and different accounting treatment of financial sector support and of defined-benefit pension plans and are converted to a general government basis. Historical data start at 2001 for most series because data compiled according to the 2001 Government Finance Statistics Manual (GFSM 2001) may not be available for earlier years.

Monetary Policy Assumptions

Monetary policy assumptions are based on the established policy framework in each country. In most cases, this implies a nonaccommodative stance over the business cycle: official interest rates will increase when economic indicators suggest that inflation will rise above its acceptable rate or range; they will decrease when indicators suggest that inflation will not exceed the acceptable rate or range, that output growth is below its potential rate, and that the margin of slack in the economy is significant. On this basis, the London interbank offered rate (LIBOR) on six-month U.S. dollar deposits is assumed to average 0.9 percent in 2016 and 1.5 percent in 2017 (see Table 1.1). The rate on three-month euro deposits is assumed to average −0.3 percent in 2016 and −0.4 percent in 2017. The interest rate on six-month Japanese yen deposits is assumed to average −0.1 percent in 2016 and −0.3 percent in 2017.

Australia: Monetary policy assumptions are in line with market expectations.

Brazil: Monetary policy assumptions are consistent with gradual convergence of inflation toward the middle of the target range over the relevant horizon.

Canada: Monetary policy assumptions are in line with market expectations.

China: Monetary policy will remain broadly unchanged from its current status, consistent with the authorities’ announcement of maintaining stable economic growth.

Denmark: The monetary policy is to maintain the peg to the euro.

Euro area: Monetary policy assumptions for euro area member countries are in line with market expectations.

Hong Kong SAR: The IMF staff assumes that the currency board system remains intact.

India: The policy (interest) rate assumption is consistent with an inflation rate within the Reserve Bank of India’s targeted band.

Indonesia: Monetary policy assumptions are in line with a reduction of inflation to within the central bank’s targeted band by the end of 2015.

Japan: The current monetary policy conditions are maintained for the projection period, and no further tightening or loosening is assumed.

Korea: Monetary policy assumptions are in line with market expectations.

Mexico: Monetary assumptions are consistent with attaining the inflation target.

Russia: Monetary projections assume increasing exchange rate flexibility as part of the transition to the new full-fledged inflation-targeting regime, as indicated in recent statements by the Central Bank of Russia. Specifically, policy rates are assumed to remain at the current levels, gradually reducing the number of interventions in the foreign exchange markets.

Saudi Arabia: Monetary policy projections are based on the continuation of the exchange rate peg to the U.S. dollar.

Singapore: Broad money is projected to grow in line with the projected growth in nominal GDP.

South Africa: Monetary projections are consistent with South Africa’s 3–6 percent inflation target range.

Sweden: Monetary projections are in line with Riks-bank projections.

Switzerland: The projections assume no change in the policy rate in 2016–17.

Turkey: Broad money and the long-term bond yield are based on IMF staff projections. The short-term deposit rate is projected to evolve with a constant spread against the interest rate of a similar U.S. instrument.

United Kingdom: Projections assume no change in monetary policy or the level of asset purchases until 2019, consistent with market expectations.

United States: Following the Federal Reserve’s 25 basis point rate hike in mid-December, financial conditions have tightened more than expected, and wage growth has yet to exert significant price pressure. The IMF staff expects the federal funds target rate to increase by 50 basis points in 2016 and rise gradually thereafter.

1 The output gap is actual minus potential output, as a percentage of potential output. Structural balances are expressed as a percentage of potential output. The structural balance is the actual net lending/borrowing minus the effects of cyclical output from potential output, corrected for one-time and other factors, such as asset and commodity prices and output composition effects. Changes in the structural balance consequently include effects of temporary fiscal measures, the impact of fluctuations in interest rates and debt-service costs, and other noncyclical fluctuations in net lending/borrowing. The computations of structural balances are based on IMF staff estimates of potential GDP and revenue and expenditure elasticities. (See Annex I of the October 1993 WEO.) Net debt is calculated as gross debt minus financial assets corresponding to debt instruments. Estimates of the output gap and of the structural balance are subject to significant margins of uncertainty.

List of Tables

Balance of Payments and External Financing

Medium-Term Baseline Scenario

Table A1.

Summary of World Output1

(Annual percent change)

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Real GDP.

Excludes the United States, euro area countries, and Japan.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table A2.

Advanced Economies: Real GDP and Total Domestic Demand1

(Annual percent change)

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In this and other tables, when countries are not listed alphabetically, they are ordered on the basis of economic size.

From the fourth quarter of the preceding year.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Table A3.

Advanced Economies: Components of Real GDP

(Annual percent change)

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Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Changes expressed as percent of GDP in the preceding period.

Table A4.

Emerging Market and Developing Economies: Real GDP

(Annual percent change)

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Data for some countries refer to real net material product (NMP) or are estimates based on NMP. 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 of the informal economy is not fully reflected in the recent figures.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Data are based on the 2008 System of National Accounts. The revised national accounts data are available beginning in 2000 and exclude Crimea and Sevastopol from 2010 onward.

In this table only, the data for Timor-Leste are based on non-oil GDP.

See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

For Iran, data are based on GDP at market prices. Corresponding data used by the IMF staff for GDP growth at factor prices are −6.8 percent for 2012/13, −1.9 percent for 2013/14, 3.0 percent for 2014/15, 0.0 percent for 2015/16, 4.0 percent for 2016/17, and 3.7 percent for 2017/18.

Data for 2011 exclude South Sudan after July 9. Data for 2012 and onward pertain to the current Sudan.

Data for Syria are excluded for 2011 onward owing to the uncertain political situation.

The Zimbabwe dollar ceased circulating in early 2009. Data are based on IMF staff estimates of price and exchange rate developments in U.S. dollars. IMF staff estimates of U.S. dollar values may differ from authorities’ estimates. Real GDP is in constant 2009 prices.

Table A5.

Summary of Inflation

(Percent)

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Excludes the United States, euro area countries, and Japan.

Based on Eurostat’s harmonized index of consumer prices.

Excludes Argentina and Venezuela. See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Data are missing because of Argentina, which accounts for more than 30 percent of the weights of the group. See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Table A6.

Advanced Economies: Consumer Prices1

(Annual percent change)

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Movements in consumer prices are shown as annual averages.

Monthly year-over-year changes and, for several countries, on a quarterly basis.

Based on Eurostat’s harmonized index of consumer prices.

Table A7.

Emerging Market and Developing Economies: Consumer Prices1

(Annual percent change)

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Movements in consumer prices are shown as annual averages.

Monthly year-over-year changes and, for several countries, on a quarterly basis.

For many countries, inflation for the earlier years is measured on the basis of a retail price index. Consumer price index (CPI) inflation data with broader and more up-to-date coverage are typically used for more recent years.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Starting in 2014 data exclude Crimea and Sevastopol.

Excludes Argentina and Venezuela.

See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Data for 2011 exclude South Sudan after July 9. Data for 2012 and onward pertain to the current Sudan.

Data for Syria are excluded for 2011 onward owing to the uncertain political situation.

The Zimbabwe dollar ceased circulating in early 2009. Data are based on IMF staff estimates of price and exchange rate developments in U.S. dollars. IMF staff estimates of U.S. dollar values may differ from authorities’ estimates.

Table A8.

Major Advanced Economies: General Government Fiscal Balances and Debt1

(Percent of GDP unless noted otherwise)

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Note: The methodology and specific assumptions for each country are discussed in Box A1. The country group composites for fiscal data are calculated as the sum of the U.S. dollar values for the relevant individual countries.

Debt data refer to the end of the year and are not always comparable across countries. Gross and net debt levels reported by national statistical agencies for countries that have adopted the System of National Accounts (SNA) 2008 (Australia, Canada, Hong Kong SAR, United States) are adjusted to exclude unfunded pension liabilities of government employees’ defined-benefit pension plans. Fiscal data for the aggregated Major Advanced Economies and the United States start in 2001, and the average for the aggregate and the United States is therefore for the period 2001–07.

Percent of potential GDP.

Figures reported by the national statistical agency are adjusted to exclude items related to the accrual-basis accounting of government employees’ defined-benefit pension plans.

Excludes one-time measures based on the authorities’ data and, in the absence of the latter, receipts from the sale of assets.

Includes equity shares; nonconsolidated basis.

Table A9.

Summary of World Trade Volumes and Prices

(Annual percent change)

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Average of annual percent change for world exports and imports.

As represented, respectively, by the export unit value index for manufactures of the advanced economies and accounting for 83 percent of the advanced economies’ trade (export of goods) weights; the average of U.K. Brent, Dubai Fateh, and West Texas Intermediate crude oil prices; and the average of world market prices for nonfuel primary commodities weighted by their 2002–04 shares in world commodity exports.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Percent change of average of U.K. Brent, Dubai Fateh, and West Texas Intermediate crude oil prices.

Percent change for manufactures exported by the advanced economies.

Table A10.

Summary of Current Account Balances

(Billions of U.S. dollars)

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Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Indonesia, Malaysia, Philippines, Thailand, Vietnam.

Table A11.

Advanced Economies: Balance on Current Account

(Percent of GDP)

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Data corrected for reporting discrepancies in intra-area transactions.

Data calculated as the sum of the balances of individual euro area countries.

Table A12.

Emerging Market and Developing Economies: Balance on Current Account

(Percent of GDP)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Starting in 2014 data exclude Crimea and Sevastopol.

See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Data for 2011 exclude South Sudan after July 9. Data for 2012 and onward pertain to the current Sudan.

Data for Syria are excluded for 2011 onward owing to the uncertain political situation.

The Zimbabwe dollar ceased circulating in early 2009. Data are based on IMF staff estimates of price and exchange rate developments in U.S. dollars. IMF staff estimates of U.S. dollar values may differ from authorities’ estimates.

Table A13.

Summary of Financial Account Balances

(Billions of U.S. dollars)

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Note: The estimates in this table are based on individual countries’ national accounts and balance of payments statistics. Country group composites are calculated as the sum of the U.S. dollar values for the relevant individual countries. Some group aggregates for the financial derivatives are not shown because of incomplete data. Projections for the euro area are not available because of data constraints.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table A14.

Summary of Net Lending and Borrowing

(Percent of GDP)

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Note: The estimates in this table are based on individual countries’ national accounts and balance of payments statistics. Country group composites are calculated as the sum of the U.S. dollar values for the relevant individual countries. This differs from the calculations in the April 2005 and earlier issues of the World Economic Outlook, in which the composites were weighted by GDP valued at purchasing power parities as a share of total world GDP. The estimates of gross national savings and investment (or gross capital formation) are from individual countries’ national accounts statistics. The estimates of the current account balance, the capital account balance, and the financial account balance (or net lending/net borrowing) are from the balance of payments statistics. The link between domestic transactions and transactions with the rest of the world can be expressed as accounting identities. Savings (S) minus investment (I) is equal to the current account balance (CAB) (S – I = CAB). Also, net lending/net borrowing (NLB) is the sum of the current account balance and the capital account balance (KAB) (NLB = CAB + KAB). In practice, these identities do not hold exactly; imbalances result from imperfections in source data and compilation as well as from asymmetries in group composition due to data availability.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table A15.

Summary of World Medium-Term Baseline Scenario

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Data refer to trade in goods and services.

London interbank offered rate on U.S. dollar deposits minus percent change in U.S. GDP deflator.

GDP-weighted average of 10-year (or nearest-maturity) government bond rates for Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Table B1.

Advanced Economies: Unemployment, Employment, and Real GDP per Capita

(Percent)

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

National definitions of unemployment may vary.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Table B2.

Emerging Market and Developing Economies: Real GDP

(Annual percent change)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B3.

Advanced Economies: Hourly Earnings, Productivity, and Unit Labor Costs in Manufacturing

(Annual percent change)

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The group composites are computed if at least 85 percent of the share of group weights is represented.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Refers to labor productivity, measured as the ratio of hourly compensation to unit labor costs.

Data refer to unit wage cost.

Table B4.

Emerging Market and Developing Economies: Consumer Prices

(Annual percent change)

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Excludes Argentina and Venezuela. See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Data are missing because of Argentina, which accounts for more than 30 percent of the weights in the group. See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Data are missing because of Argentina and Venezuela, which account for approximately 15 percent of the weights in the group. See country-specific notes in the “Country Notes” section of the Statistical Appendix.

Table B5.

Summary of Fiscal and Financial Indicators

(Percent)

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Note: The country group composites for fiscal data are calculated as the sum of the U.S. dollar values for the relevant individual countries.

Percent of GDP.

Figures reported by the national statistical agency are adjusted to exclude items related to the accrual-basis accounting of government employees’ defined-benefit pension plans.

Excludes the United States, euro area countries, and Japan.

Percent of potential GDP.

Annual data are period averages: for the United States, 10-year Treasury bond yield at constant maturity; for Japan, 10-year government bond yield; for the euro area, weighted average of national 10-year government bond yields.

Table B6.

Advanced Economies: General and Central Government Net Lending/Borrowing and General Government Net Lending/Borrowing Excluding Social Security Schemes1

(Percent of GDP)

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Note: The country group composites for fiscal data are calculated as the sum of the U.S. dollar values for the relevant individual countries.

On a national income accounts basis except as indicated in notes. The methodology and specific assumptions for each country are discussed in Box A1.

Figures reported by the national statistical agency are adjusted to exclude items related to the accrual-basis accounting of government employees’ defined-benefit pension plans.

Adjusted for valuation changes of the foreign exchange stabilization fund.

Based on ESA95 methodology, according to which swap income is not included.

For 2015, data are preliminary. Fiscal projections for 2016—21 are not available at this time, given ongoing negotiations with the authorities and European partners on the fiscal targets in a potential new adjustment program.

The general government balances between 2009 and 2014 reflect the impact of bank support. The fiscal balance estimates excluding these measures are −11.3 percent of GDP for 2009, −10.6 percent of GDP for 2010, −8.9 percent of GDP for 2011, −7.6 percent of GDP for 2012, −7.5 percent of GDP for 2013 (including exchequer outlays for guarantees paid out under the Eligible Liabilities Guarantee [ELG] scheme in the context of the liquidation of the Irish Bank Resolution Corporation [IBRC]), and −4.9 percent of GDP for 2014.

Data cover the central government and social security funds and are on a cash basis. The 2011 fiscal balance includes 0.7 percent of GDP in costs for recapitalization of the largest state bank, which were treated as state aid.

Data cover the consolidated central government, including social security funds but excluding privatization.

Data exclude total social contributions and payments, not only social security.

Data are on a budget basis.

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

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

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Table B7.

Advanced Economies: General Government Structural Balances1

(Percent of potential GDP)

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Note: The country group composites for fiscal data are calculated as the sum of the U.S. dollar values for the relevant individual countries.

On a national income accounts basis. The structural balance position is defined as actual net lending/borrowing minus the effects of cyclical output from potential output, corrected for one-time and other factors, such as asset and commodity prices and output composition effects. Because of the margin of uncertainty that attaches to estimates of cyclical gaps and to tax and expenditure elasticities with respect to national income, indicators of structural budget positions should be interpreted as broad orders of magnitude. Moreover, it is important to note that changes in structural balances are not necessarily attributable to policy changes but may reflect the built-in momentum of existing expenditure programs. In the period beyond that for which specific consolidation programs exist, it is assumed that the structural deficit remains unchanged.

Figures reported by the national statistical agency are adjusted to exclude items related to the accrual-basis accounting of government employees’ defined-benefit pension plans.

Excludes sizable one-time receipts from the sale of assets, including licenses. For Spain, includes adjustments beyond the output cycle.

Excludes one-time measures based on authorities’ data and, in the absence of the latter, receipts from the sale of assets.

For 2015, data are preliminary. Fiscal projections for 2016–21 are not available at this time, given ongoing negotiations with the authorities and European partners on the fiscal targets in a potential new adjustment program.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Excludes oil and income on the Government Pension Fund—Global.

Table B8.

Emerging Market and Developing Economies: General Government Net Lending/Borrowing and Overall Fiscal Balance

(Percent of GDP)

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Note: The country group composites for fiscal data are calculated as the sum of the U.S. dollar values for the relevant individual countries.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Net lending/borrowing, including policy lending, which represents the value of transactions in financial assets that are deemed to be for public policy purposes.

Table B9.

Emerging Market and Developing Economies: General Government Net Lending/Borrowing

(Percent of GDP)

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Note: For some countries, the general government series are the same as those for the central government level. Please refer to Table G, which lists the government finance subsectors coverage for each country.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Starting in 2014 data exclude Crimea and Sevastopol.

See country-specific notes for Argentina in the “Country Notes” section of the Statistical Appendix.

Pakistan’s data for the projection years exclude payments for electricity arrears and commodity operations.

Data for 2011 exclude South Sudan after July 9. Data for 2012 and onward pertain to the current Sudan.

Data for Syria are excluded for 2011 onward owing to the uncertain political situation.

Table B10.

Selected Advanced Economies: Exchange Rates

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Defined as the ratio, in common currency, of the unit labor costs in the manufacturing sector to the weighted average of those of its advanced economy trading partners, using 2004–06 trade weights.

Table B11.

Emerging Market and Developing Economies: Broad Money Aggregates

(Annual percent change)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B12.

Advanced Economies: Export Volumes, Import Volumes, and Terms of Trade in Goods and Services

(Annual percent change)

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Calculated as the average of individual euro area countries.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Table B13.

Emerging Market and Developing Economies by Region: Total Trade in Goods

(Annual percent change)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B14.

Emerging Market and Developing Economies by Source of Export Earnings: Total Trade in Goods

(Annual percent change)

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Table B15.

Summary of Current Account Transactions

(Billions of U.S. dollars)

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Note: Country group composites are calculated as the sum of the U.S. dollar values for the relevant individual countries.

Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B16.

Emerging Market and Developing Economies: Summary of External Debt and Debt Service

(Billions of U.S. dollars)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Apart from interest, debt service for a particular year includes amortization of short-term debt on an original-maturity basis outstanding at the end of the previous year, plus the portion of long-term debt outstanding at the end of the previous year maturing during the current year. The projections incorporate the impact of exceptional-financing items.

Total debt at the end of the year in percent of exports of goods and services in the year indicated.

Table B17.

Emerging Market and Developing Economies by Region: External Debt by Maturity

(Billions of U.S. dollars)

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Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B18.

Emerging Market and Developing Economies by Analytical Criteria: External Debt by Maturity

(Billions of U.S. dollars)

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Table B19.

Emerging Market and Developing Economies: Ratio of External Debt to GDP1

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Debt at the end of the year in percent of GDP in the year indicated.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B20.

Emerging Market and Developing Economies: Debt-Service Ratios1

(Percent of exports of goods and services)

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Excludes service payments to the IMF.

Interest payments and amortization on total debt. Estimates through 2015 reflect debt-service payments actually made. Estimates for 2016 and 2017 take into account projected exceptional-financing items, including accumulation of arrears and rescheduling arrangements. In some cases, amortization on account of debt-reduction operations is included.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Table B21.

Emerging Market and Developing Economies, Medium-Term Baseline Scenario: Selected Economic Indicators

(Annual percent change)

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Data refer to trade in goods and services.

Georgia, Turkmenistan, and Ukraine, which are not members of the Commonwealth of Independent States, are included in this group for reasons of geography and similarity in economic structure.

Interest payments and amortization on total debt. The projections incorporate the impact of exceptional-financing items. Excludes service payments to the IMF.

World Economic Outlook Selected Topics

World Economic Outlook Archives

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I. Methodology—Aggregation, Modeling, and Forecasting

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II. Historical Surveys

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III. Economic Growth—Sources and Patterns

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IV. Inflation and Deflation and Commodity Markets

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V. Fiscal Policy

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VI. Monetary Policy, Financial Markets, and Flow of Funds

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VII. Labor Markets, Poverty, and Inequality

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VIII. Exchange Rate Issues

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IX. External Payments, Trade, Capital Movements, and Foreign Debt

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X. Regional Issues

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XI. Country-Specific Analyses

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XII. Special Topics

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IMF Executive Board Discussion of the Outlook, April 2016

The following remarks were made by the Chair at the conclusion of the Executive Board’s discussion of the Fiscal Monitor, Global Financial Stability Report, and World Economic Outlook on March 28, 2016.

Executive Directors broadly shared the assessment of global economic prospects and risks. They noted that while the global economy continues to expand modestly, prospects have weakened across a wide range of countries, and downside risks are rising. Risks to global financial stability have also increased amid volatility in global asset markets, weaker confidence, and geopolitical tensions. Directors agreed that the current conjuncture increases the urgency of a broad-based policy response, both individually and collectively, to raise growth, manage vulnerabilities, and boost confidence.

Directors observed that growth in advanced economies is projected to remain modest, in line with the 2015 outcomes. A stronger recovery continues to be restrained by weak external demand, low productivity growth, unfavorable demographic trends, growing income inequality, and legacies from the 2008–09 global financial crisis. Meanwhile, deflation risks remain a concern in Japan and several euro area countries.

Directors noted the generally weakening outlook for emerging market and developing economies, reflecting tighter global financial conditions and a weaker commodity market outlook. Growth prospects differ considerably across countries, and many have demonstrated more resilience to shocks given existing buffers and strengthened fundamentals and policy frameworks. China’s transition toward more sustainable growth, backed by ample policy buffers, is a welcome development; however, given the increasingly prominent role of China in the world economy and financial markets, challenges and uncertainties in the process could have potential international implications.

Directors concurred that the outlook for global financial stability is clouded by downside risks. They noted in particular market pressures on banking systems and life insurance sectors in advanced economies. Emerging market economies face volatile capital flows and exchange rate pressures, as well as corporate sector vulnerabilities. A more balanced and potent policy mix that includes strong supervision, macroprudential frameworks, and implementation of the regulatory reform agenda is therefore vital.

Directors underscored that a combination of structural reforms and supportive monetary and fiscal policies is needed to raise actual and potential output. They generally endorsed the main policy recommendations in the reports, although the appropriate mix should be tailored to each country’s circumstances. Directors also highlighted the importance of clear communication of policy intentions, especially by large economies. Commitment by policymakers to facilitate cross-border trade flows and global rebalancing remains crucial and must be followed through in order to achieve strong, sustainable, and balanced global growth. The fragile conjuncture calls for concerted efforts to identify potential responses to downside risks were they to materialize, to ensure strong, well-coordinated oversight and global financial safety nets and to ring-fence spillovers from noneconomic shocks.

Directors broadly agreed that, in advanced economies, securing higher sustainable growth requires a bold three-pronged approach consisting of mutually reinforcing (1) structural reforms, (2) continued monetary policy accommodation, and (3) prudent fiscal support. Recognizing the need to avoid overburdening monetary policy and preserve debt sustain-ability, Directors saw as a key element of this strategy a well-designed and -sequenced country-specific structural reform agenda that takes into account both the short- and medium-term impact of reforms. Reforms that entail fiscal support and reduce barriers to entry in product and services markets would best help strengthen near-term demand, while well-targeted tax and spending policies to encourage innovation and education investment could also play a useful role.

Directors stressed that accommodative monetary policy remains important, particularly in Japan and the euro area. Mindful of the side effects of extremely low—and, in some countries, negative—interest rates on domestic financial institutions, exchange rates, and other countries, they stressed the importance of complementary efforts to enhance policy transmission and accelerate balance sheet repair. The growing systemic importance of the insurance sector, in an environment of low interest rates, warrants a strong macroprudential approach to supervision and regulation.

Directors agreed that, where needed and where fiscal space is available, fiscal policy in advanced economies should be supportive of short- and medium-term growth—with a focus on boosting future productive capacity, in particular through infrastructure investment, and financing demand-friendly structural reforms. To preserve debt sustainability and anchor expectations, any fiscal relaxation should be based on a credible plan to return fiscal policy settings back toward targets over the medium term. Where fiscal space is limited, the emphasis should be placed on a more growth-friendly composition of the budget.

While recognizing the diverse challenges facing policymakers in emerging market and developing economies, Directors agreed that common policy priorities center on reducing macroeconomic and financial vulnerabilities and rebuilding resilience. They stressed that, in many countries, better fiscal and debt management frameworks that anchor longer-term plans will help mitigate procyclical policy and build resilience, while structural reforms are urgently needed to raise productivity and remove bottlenecks to production. Exchange rate flexibility, where feasible, can help cushion external shocks, although its effects on inflation and the balance sheets of the private and public sectors would need to be monitored closely.

Directors noted that the positive growth effects of the decline in commodity prices in commodity-importing economies have been less pronounced than expected. Commodity-exporting countries, on the other hand, have been hit hard and many have run down their policy buffers. Some of these countries need to adjust public spending to lower fiscal revenues. This adjustment should be complemented by further efforts to improve revenue diversification and phase out poorly targeted and wasteful spending, including fuel subsidies. For commodity importers, depending on their needs, part of the windfall gains from lower oil prices could be used to finance critical structural reforms or growth-enhancing spending.

Directors concurred that, in low-income countries, policies must respond to the heightened challenges and vulnerabilities stemming from the difficult external environment, taking account of domestic circumstances. For many commodity exporters whose fiscal and external balances are deteriorating, a tight macro-economic policy stance is required to preserve hard-won macroeconomic stability. Directors also stressed the need to make further progress toward the Sustainable Development Goals, particularly through economic diversification, domestic revenue mobilization, and financial deepening. Appropriate policy advice and adequate financial assistance from the IMF and development partners remain important in that regard.

1

Many countries are implementing the SNA 2008 or European System of National and Regional Accounts (ESA) 2010, and a few countries use versions of the SNA older than 1993. A similar adoption pattern is expected for the BPM6. Please refer to Table G, which lists the statistical standards adhered to by each country.

2

Averages for real GDP and its components, employment, GDP per capita, inflation, factor productivity, trade, and commodity prices are calculated based on the compound annual rate of change, except in the case of the unemployment rate, which is based on the simple arithmetic average.

3

See “Revised Purchasing Power Parity Weights” in the July 2014 WEO Update for a summary of the revised purchasing-power-parity-based weights, as well as Box A2 of the April 2004 WEO and Annex IV of the May 1993 WEO. See also Anne-Marie Gulde and Marianne Schulze-Ghattas, “Purchasing Power Parity Based Weights for the World Economic Outlook” in Staff Studies for the World Economic Outlook (Washington: International Monetary Fund, December 1993), pp. 106–23.

4

As used here, the terms “country” and “economy” do not always refer to a territorial entity that is a state as understood by international law and practice. Some territorial entities included here are not states, although their statistical data are maintained on a separate and independent basis.

5

During 2010–14, 17 economies incurred external payments arrears or entered into official or commercial bank debt-rescheduling agreements. This group is referred to as economies with arrears and/or rescheduling during 2010–14.

6

See David Andrews, Anthony R. Boote, Syed S. Rizavi, and Suk-winder Singh, Debt Relief for Low-Income Countries: The Enhanced HIPC Initiative, IMF Pamphlet Series 51 (Washington: International Monetary Fund, November 1999).

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Cover World Economic Outlook, April 2016
World Economic Outlook, April 2016
Too Slow for Too Long
Author:
International Monetary Fund. Research Dept.
ISBN:
9781498398589
ISSN:
0256-6877
Publication Date:
12 Apr 2016
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781498398589.081
Pages:
261