Back Matter
Author:
International Monetary Fund. Research Dept.
Search for other papers by International Monetary Fund. Research Dept. in
Current site
Google Scholar
PubMedClose
Language:
English
Keywords:
WEO; economy; emerging market; inflation expectation; commodity exporter; commodity market development; advanced economy; U.S. dollar; inflation goal; Inflation; Emerging and frontier financial markets; Imports; Migration; Commodity prices; Global; Sub-Saharan Africa; Middle East; North Africa; Asia and Pacific
Download PDF (1.7 MB)

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 April 2016 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 September 16, 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 July 22 to August 19, 2016. For 2016 and 2017, these assumptions imply average U.S. dollar/special drawing right (SDR) conversion rates of 1.398 and 1.403 (the Chinese renminbi, which became an SDR currency on October 1, 2016, is excluded from the calculations), U.S. dollar/euro conversion rates of 1.117 and 1.127, and yen/U.S. dollar conversion rates of 106.8 and 99.9, respectively.

It is assumed that the price of oil will average $42.96 a barrel in 2016 and $50.64 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 1.0 percent in 2016 and 1.3 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 0.0 percent in 2016 and −0.1 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:

article image

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

No changes have been introduced for the October 2016 WEO database.

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 2014 (GFSM 2014)—have been or are being aligned with the SNA 2008. 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.1

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

  • On February 1, 2013, the IMF issued a declaration of censure, and since then has called on Argentina to implement specified actions to address the quality of its official GDP data. The new government that took office in December 2015 released a revised GDP series on June 29, 2016. At the IMF Executive Board meeting that took place on August 31, 2016, the revised series was considered to be in line with international standards.

  • The consumer price data for Argentina before December 2013 reflect the consumer price index (CPI) for the Greater Buenos Aires Area (CPI-GBA), while from December 2013 to October 2015 the data reflect the national CPI (IPCNu). The new government that took office in December 2015 discontinued the IPCNu, stating that it was flawed, and released a new CPI for the Greater Buenos Aires Area on June 15, 2016. Given the differences in geographical coverage, weights, sampling, and methodology of these series, the average CPI inflation for 2014, 2015, and 2016 and end-of-period inflation for 2015 are not reported in the October 2016 World Economic Outlook. On February 1, 2013, the IMF issued a declaration of censure and since then has called on Argentina to implement specified actions to address the quality of its official CPI data. At the meeting that took place on August 31, 2016, the IMF Executive Board noted the important progress made in strengthening the accuracy of the CPI data. The Managing Director will report to the Executive Board on this issue again by November 15, 2016.

  • Argentina’s authorities discontinued the publication of labor market data in December 2015 and released new series starting in the second quarter of 2016.

  • Argentina’s and Venezuelas consumer prices are excluded from all WEO group aggregates.

  • 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.

  • India’s growth rates of real GDP calculated from 1998 to 2011 are as per national accounts with base year 2004/05, and thereafter are as per national accounts with base year 2011/12.

  • 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 absence of Article IV consultations since 2004 and delays in the publication of key economic data. General government revenue (1) includes the IMF staff’s estimated foreign exchange profits transferred from the central bank to the government (buying U.S. dollars at the most appreciated rate and selling at more depreciated rates in a multitier exchange rate system) and (2) excludes the IMF staff’s estimated revenue from PDVSA’s sale of PetroCaribe assets to the central bank.

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.

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)

article image

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 and Syria are omitted from the net external position group composites because of insufficient data.

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 B.

Advanced Economies by Subgroup

article image

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

Table C.

European Union

article image

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.

Table D.

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

article image

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

article image
article image
article image
article image

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 and Syria are omitted from the net external position group composite for lack of a fully developed database.

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 2011 and 2015.

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 2015 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 F.

Economies with Exceptional Reporting Periods1

article image

Unless noted otherwise, all data refer to calendar years.

Table G.

Key Data Documentation

article image
article image
article image
article image
article image
article image
article image
article image
article image
article image
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; NSO = National Statistics Office; PFTAC = Pacific Financial Technical Assistance Centre.

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 accounting; C = cash accounting; CB = commitments basis accounting; Mixed = combination of accrual and cash accounting.

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 macroeconomic 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 2016–2017 budget, 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 2016–19 Stability Programme, incorporated into the IMF staff’s macroeconomic framework.

Brazil: For 2015, outturn estimates are based on the information available as of April 2016. Fiscal projections for the end of 2016 take into account budget performance through June 30, 2016, and the deficit target revision announced by the authorities in May 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 second quarter 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: Estimates for 2015 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’ Convergence Programme 2016 submitted to the European Union (EU).

France: Projections for 2016 reflect the budget law. For 2017–19, they are based on the multiyear budget and the April 2016 Stability Programme, adjusted for differences in assumptions on macro and financial variables, and revenue projections. Historical fiscal data reflect the statistical institute’s September 2016 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: 2016 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: The fiscal projections reflect the IMF staff’s assessment, assuming full implementation of the authorities’ fiscal policy package under the European Stability Mechanism–supported 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 2016 Summer Economic Statement, 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 and 2016 Economic and Financial Document, published in April of this year. 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 the authorities’ declared policy intentions, which implies corrective measures in some years, as yet unidentified.

Japan: The projections include fiscal measures already announced by the government, including the fiscal year 2016 supplementary budget, the upcoming fiscal stimulus package for 2017, and the consumption tax hike in October 2019.

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

Mexico: Fiscal projections for 2016 are broadly in line with the approved budget; projections for 2017 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’ 2016–17 budget 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 projections for 2016 reflect the authorities’ approved budget, adjusted to reflect the IMF staff’s macroeconomic forecast and the first-half cash outturn. Projections thereafter are based on the assumption of unchanged policies.

Puerto Rico: Fiscal projections are based on the Puerto Rico Fiscal and Economic Growth Plan (FEGP), which was prepared in 2015 pursuant to Governor Alejandro García Padilla’s executive order, with subsequent further updates on debt data in 2016. In line with assumptions of this plan, IMF projections assume that Puerto Rico will lose federal funding for the Affordable Care Act (ACA) starting in 2018. Likewise, projections assume federal tax incentives, which were neutralizing the effects of Puerto Rico’s Act 154 on foreign companies, will no longer be available, starting in 2018, leading to additional revenue losses. In terms of policy assumptions, FEGP presents a scenario without measures and an alternative scenario with various revenue and expenditure measures; IMF projections assume full implementation of the FEGP measures. On the revenue side, the main measures are (1) an increase in the corporate tax base and (2) improvement in tax administration and enforcement. These are in addition to full transition to a value-added tax, which is an ongoing measure and is expected to be completed by the end of 2016. On the expenditure side, measures include extension of Act 66, which freezes much government spending, through 2021; reduction of operating costs; decreases in government subsidies; and spending cuts in education and health care. Although IMF policy assumptions are exactly as in the FEGP scenario with full measures, the IMF’s projections of fiscal revenues, expenditures, and balance are different from FEGP’s. This stems from two main differences in methodologies: first and foremost, while IMF projections are on an accrual basis, FEGP’s are on a cash basis. Second, the IMF and FEGP make very different macroeconomic assumptions.

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 2015/16 and 2016/17, 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 2016 and beyond, fiscal estimates and projections are based on the measures specified in the Stability Programme Update 2016–19 and the IMF staff’s macroeconomic projections.

Sweden: Fiscal projections take into account the authorities’ projections based on the 2016 Spring Budget. 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’ 2016–18 Medium Term Programme based on current trends and policies.

United Kingdom: Fiscal projections are based on the 2016 budget, published in March 2016, with revenue projections adjusted for the actual fiscal year 2015/16 outturn and with revenue and expenditure projections adjusted for differences between IMF staff forecasts of macroeconomic variables (such as GDP growth and inflation) 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 March 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 1.0 percent in 2016 and 1.3 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 0.0 percent in 2016 and −0.1 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 the maintenance of inflation within the central bank’s targeted band by the end of 2016.

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

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 new inflation-targeting regime, with policy rates falling over the next year as inflation continues to decline and second-round effects are subdued.

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 Riksbank 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 the Bank Rate over the forecast period, 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.

List of Tables

Balance of Payments and External Financing

Medium-Term Baseline Scenario

Table A1.

Summary of World Output1

(Annual percent change)

article image

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)

article image

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)

article image
article image

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)

article image
article image
article image

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.

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

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.

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)

article image

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)

article image

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)

article image
article image
article image

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 the group for reasons of geography and similarity in economic structure.

Starting in 2014 data exclude Crimea and Sevastopol.

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.

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)

article image
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 Special Administrative Region, 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)

article image
article image

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)

article image
article image
article image

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)

article image

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)

article image
article image
article image

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)

article image
article image
article image
article image
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)

article image
article image
article image
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

article image

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.

World Economic Outlook Selected Topics

World Economic Outlook Archives

article image

I. Methodology—Aggregation, Modeling, and Forecasting

article image

II. Historical Surveys

article image
article image

III. Economic Growth—Sources and Patterns

article image
article image

IV. Inflation and Deflation and Commodity Markets

article image
article image

V. Fiscal Policy

article image
article image

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

article image
article image

VII. Labor Markets, Poverty, and Inequality

article image

VIII. Exchange Rate Issues

article image

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

article image
article image

X. Regional Issues

article image

XI. Country-Specific Analyses

article image
article image

XII. Special Topics

article image

IMF Executive Board Discussion of the Outlook, October 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 September 23, 2016.

Executive Directors broadly shared the assessment of global economic prospects and risks. They observed that global growth is likely to remain modest this year, world trade growth is declining, and low inflation persists in many advanced economies. On the upside, commodity prices have firmed up, and financial market volatility following the U.K. vote to leave the European Union has generally been contained. Directors noted that, while global growth is expected to pick up somewhat next year, downside risks and uncertainty are elevated. The potential for another setback cannot be ruled out. Directors urged policymakers to employ all policy levers—individually and collectively—and enhance global cooperation, to avoid further growth disappointments, strengthen the foundations of the recovery, revive global trade, and ensure that the benefits of globalization are shared more broadly.

Directors noted that growth in advanced economies is projected to weaken this year and edge up slightly next year. Nevertheless, the overall outlook continues to be weighed down by remaining crisis legacy issues, persistently low inflation, weak demand, continued large external imbalances in some countries, low labor productivity growth, and population aging. At the same time, the full macroeconomic implications of the U.K. vote have yet to unfold. In emerging market and developing countries, growth is expected to strengthen gradually, on the back of improved external financing conditions, rising commodity prices, and a gradual stabilization in key economies currently in recession. Many countries have made steady progress in strengthening policy frameworks and resilience to shocks, and market sentiment has recently improved. Notwithstanding these positive developments, emerging market and developing economies remain exposed to spillovers from subdued growth in advanced economies, developments in China during its transition toward more sustainable growth, and volatility in capital flows and exchange rates, while domestic challenges remain to be addressed. Globally, concerns are growing about political discontent, income inequality, and populist policies, threatening to derail globalization.

Directors observed that, while financial markets have shown resilience to a number of shocks in the past six months, medium-term risks are rising. In advanced economies where weak growth calls for continued accommodative monetary policy, a prolonged period of low growth and low interest rates could add to banks’ structural profitability challenges and put at risk the solvency of many life insurance companies and pension funds. These risks and challenges could, in turn, further weaken economic activity and financial stability more broadly. In many emerging market economies, high corporate leverage and the growing complexity of financial products continue to pose challenges.

Against this backdrop, Directors emphasized the urgent need for comprehensive, clearly articulated strategies—combining structural, macroeconomic, and financial policies—to lift actual and potential output, manage vulnerabilities, and enhance resilience. They recognized that the optimal policy mix will vary according to country contexts and the particular priorities. Directors also stressed that intensified multilateral cooperation is crucial to sustain global growth and improvements in living standards. Specifically, concerted efforts are needed to promote strong, sustainable, balanced, and inclusive growth; facilitate cross-border trade and investment flows; implement effective banking resolution frameworks; reduce policy uncertainty, including through clear communication; and sustain progress on global rebalancing. Strong global safety nets are also vital to deal with shocks, including those stemming from refugee flows, climate events, and domestic strife.

Directors broadly concurred that, in most advanced economies, policy action will need to continue to support demand in the short term and boost productivity and potential output in the medium term. Continued monetary accommodation remains appropriate to lift inflation expectations, while being mindful of negative side effects, but monetary policy alone would not be sufficient for closing output gaps and achieving balanced and sustainable growth. Growth-friendly fiscal policy is therefore essential, calibrated to the amount of space available in each country while ensuring long-term debt sustainability, anchored in a credible medium-term framework. Sustained efforts to repair bank and corporate balance sheets would help improve the transmission of monetary policy to real activity, and proactive use of macroprudential policies would safeguard financial stability. Structural reforms need to be prioritized depending on country circumstances, with a focus on raising labor force participation rates, enhancing the efficiency of the labor market, reducing barriers to entry, and encouraging research and development. In the corporate sector, reforms should focus on eliminating debt overhangs, facilitating restructuring, and further improving governance.

Directors acknowledged that circumstances and challenges in emerging market and developing countries vary depending on their level of development and cyclical position. To achieve the common objective of converging to higher levels of income, structural reforms should focus on facilitating technology diffusion and job creation, and enhancing human capital. Directors encouraged taking advantage of the current relatively benign external financial conditions to press ahead with needed corporate deleveraging, through a comprehensive approach, where warranted. This should be complemented by continued efforts to strengthen financial sector oversight, upgrade regulatory and supervisory frameworks, and improve corporate governance practices. Directors stressed that a smooth adjustment in China’s corporate and financial sectors is crucial for sustaining growth and stability in China and elsewhere.

Directors stressed the need for financial institutions, particularly in advanced economies, to adapt their business models to new realities and evolving regulatory standards. Greater vigilance by regulators and improved data collection on nonbank financial institutions are essential to preserve their financial health and monitor their role in monetary policy transmission. Policymakers can help reduce uncertainty by completing the regulatory reform agenda, without significantly increasing overall capital requirements, while preserving the integrity of a robust capital framework. Directors broadly agreed that, in countries facing a private sector debt overhang or where the financial system is seriously impaired but fiscal space is available, well-targeted fiscal measures—with the support of strong insolvency and bankruptcy procedures and safeguards to limit moral hazard—could help facilitate private debt restructuring. Many emerging market countries should continue to enhance resilience, including by curbing excessive private debt build-up and strengthening the government balance sheet in upturns.

Directors underscored that policy priorities in low-income countries are to address near-term mac-roeconomic challenges and make progress toward their Sustainable Development Goals. In commodity-dependent economies, building fiscal buffers will require increasing the contribution of the non-commodity sector to tax revenue, together with spending rationalization. For countries less dependent on commodities, countercyclical macroeconomic policies should be adopted where growth remains robust, and debt management practices strengthened to lower the impact of potential shifts in capital flows. More broadly, achieving robust, sustainable, and inclusive growth requires sustained efforts to diversify the economy, broaden the revenue base, improve the efficiency of government spending, and enhance financial deepening.

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 and GFSM 2014. 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 2011–15, 20 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 2011–15.

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).

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.

  • Collapse
  • Expand
Cover World Economic Outlook, October 2016
World Economic Outlook, October 2016
Subdued Demand: Symptoms and Remedies
Author:
International Monetary Fund. Research Dept.
ISBN:
9781513599540
ISSN:
0256-6877
Publication Date:
04 Oct 2016
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781513599540.081
Pages:
286