World Economic Outlook, October 2016 : Subdued Demand: Symptoms and Remedies

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International Monetary Fund. Research Dept.
Published Date:
October 2016
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    World Economic Outlook

    October 2016

    Subdued Demand

    Symptoms and Remedies

    ©2016 International Monetary Fund

    Cover and Design: Luisa Menjivar and Jorge Salazar

    Composition: AGS, An RR Donnelley Company

    Cataloging-in-Publication Data

    Joint Bank-Fund Library

    Names: International Monetary Fund.

    Title: World economic outlook (International Monetary Fund)

    Other titles: WEO | Occasional paper (International Monetary Fund) | World economic and financial surveys.

    Description: Washington, DC : International Monetary Fund, 1980- | Semiannual | Some issues also have thematic titles. | Began with issue for May 1980. | 1981-1984: Occasional paper / International Monetary Fund, 0251-6365 | 1986-: World economic and financial surveys, 0256-6877.

    Identifiers: ISSN 0256-6877 (print) | ISSN 1564-5215 (online)

    Subjects: LCSH: Economic development—Periodicals. | International economic relations—Periodicals. | Debts, External—Periodicals. | Balance of payments—Periodicals. | International finance—Periodicals. | Economic forecasting—Periodicals.

    Classification: LCC HC10.W79


    ISBN 978-1-51359-954-0 (paper)

    978-1-47553-996-7 (PDF)

    978-1-47553-981-3 (ePub)

    978-1-47553-998-1 (Mobi)

    The World Economic Outlook (WEO) is a survey by the IMF staff published twice a year, in the spring and fall. The WEO is prepared by the IMF staff and has benefited from comments and suggestions by Executive Directors following their discussion of the report on September 23, 2016. The views expressed in this publication are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Directors or their national authorities.

    Recommended citation: International Monetary Fund. 2016. World Economic Outlook: Subdued Demand: Symptoms and Remedies. Washington, October.

    Publication orders may be placed online, by fax, or through the mail:

    International Monetary Fund, Publication Services

    P.O. Box 92780, Washington, DC 20090, U.S.A.

    Tel.: (202) 623-7430 Fax: (202) 623-7201



    Editor’s note

    October 4, 2016

    Statistical Tables A2 and A6 have been replaced to correct incorrect values for Macao SAR, Iceland, and San Marino in the first column of each table.

    Assumptions and Conventions

    A number of assumptions have been adopted for the projections presented in the World Economic Outlook (WEO). It has been assumed that real effective exchange rates remained constant at their average levels during July 22 to August 19, 2016, except for those for the currencies participating in the European exchange rate mechanism II (ERM II), which are assumed to have remained constant in nominal terms relative to the euro; that established policies of national authorities will be maintained (for specific assumptions about fiscal and monetary policies for selected economies, see Box A1 in the Statistical Appendix); that the average price of oil will be $42.96 a barrel in 2016 and $50.64 a barrel in 2017 and will remain unchanged in real terms over the medium term; that the six-month London interbank offered rate (LIBOR) on U.S. dollar deposits will average 1.0 percent in 2016 and 1.3 percent in 2017; that the three-month euro deposit rate will average −0.3 percent in 2016 and −0.4 percent in 2017; and that the six-month Japanese yen deposit rate will yield on average 0.0 percent in 2016 and −0.1 percent in 2017. These are, of course, working hypotheses rather than forecasts, and the uncertainties surrounding them add to the margin of error that would in any event be involved in the projections. The estimates and projections are based on statistical information available through September 16, 2016.

    The following conventions are used throughout the WEO:

    . . . to indicate that data are not available or not applicable;

    – between years or months (for example, 2015–16 or January–June) to indicate the years or months covered, including the beginning and ending years or months; and

    / between years or months (for example, 2015/16) to indicate a fiscal or financial year.

    “Billion” means a thousand million; “trillion” means a thousand billion.

    “Basis points” refers to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).

    Data refer to calendar years, except in the case of a few countries that use fiscal years. Please refer to Table F in the Statistical Appendix, 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 in the Statistical Appendix, which lists the latest actual outturns for the indicators in the national accounts, prices, government finance, and balance of payments indicators for each country.

    In the tables and figures, the following conventions apply:

    • If no source is listed on tables and figures, data are drawn from the WEO database.

    • When countries are not listed alphabetically, they are ordered on the basis of economic size.

    • Minor discrepancies between sums of constituent figures and totals shown reflect rounding.

    As used in this report, the terms “country” and “economy” do not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

    Composite data are provided for various groups of countries organized according to economic characteristics or region. Unless noted otherwise, country group composites represent calculations based on 90 percent or more of the weighted group data.

    The boundaries, colors, denominations, and any other information shown on the maps do not imply, on the part of the International Monetary Fund, any judgment on the legal status of any territory or any endorsement or acceptance of such boundaries.

    Further Information and Data

    This version of the World Economic Outlook (WEO) is available in full through the IMF eLibrary ( and the IMF website ( Accompanying the publication on the IMF website is a larger compilation of data from the WEO database than is included in the report itself, including files containing the series most frequently requested by readers. These files may be downloaded for use in a variety of software packages.

    The data appearing in the World Economic Outlook are compiled by the IMF staff at the time of the WEO exercises. The historical data and projections are based on the information gathered by the IMF country desk officers in the context of their missions to IMF member countries and through their ongoing analysis of the evolving situation in each country. Historical data are updated on a continual basis as more information becomes available, and structural breaks in data are often adjusted to produce smooth series with the use of splicing and other techniques. IMF staff estimates continue to serve as proxies for historical series when complete information is unavailable. As a result, WEO data can differ from those in other sources with official data, including the IMF’s International Financial Statistics.

    The WEO data and metadata provided are “as is” and “as available,” and every effort is made to ensure their timeliness, accuracy, and completeness, but it cannot be guaranteed. When errors are discovered, there is a concerted effort to correct them as appropriate and feasible. Corrections and revisions made after publication are incorporated into the electronic editions available from the IMF eLibrary ( and on the IMF website ( All substantive changes are listed in detail in the online tables of contents.

    For details on the terms and conditions for usage of the WEO database, please refer to the IMF Copyright and Usage website (

    Inquiries about the content of the World Economic Outlook and the WEO database should be sent by mail, fax, or online forum (telephone inquiries cannot be accepted):

    World Economic Studies Division

    Research Department

    International Monetary Fund

    700 19th Street, N.W.

    Washington, D.C. 20431, U.S.A.

    Fax: (202) 623-6343

    Online Forum:


    The analysis and projections contained in the World Economic Outlook are integral elements of the IMF’s surveillance of economic developments and policies in its member countries, of developments in international financial markets, and of the global economic system. The survey of prospects and policies is the product of a comprehensive interdepartmental review of world economic developments, which draws primarily on information the IMF staff gathers through its consultations with member countries. These consultations are carried out in particular by the IMF’s area departments—namely, the African Department, Asia and Pacific Department, European Department, Middle East and Central Asia Department, and Western Hemisphere Department—together with the Strategy, Policy, and Review Department, the Monetary and Capital Markets Department, and the Fiscal Affairs Department.

    The analysis in this report was coordinated in the Research Department under the general direction of Maurice Obstfeld, Economic Counsellor and Director of Research. The project was directed by Gian Maria Milesi-Ferretti, Deputy Director, Research Department; Oya Celasun, Division Chief, Research Department; and Helge Berger, Division Chief, Research Department and Head of the IMF’s Spillover Task Force.

    The primary contributors to this report were Rabah Arezki, Aqib Aslam, Claudia Berg, Samya Beidas-Strom, Patrick Blagrave, Christian Bogmans, Emine Boz, Luis Catão, Eugenio Cerutti, Sangyup Choi, Davide Furceri, Bertrand Gruss, Zsóka Kóczán, Ksenia Koloskova, Toh Kuan, Weicheng Lian, Akito Matsumoto, Malhar Nabar, Marcos Poplawski-Ribeiro, Sweta Saxena, Petia Topalova, and Esteban Vesperoni.

    Other contributors include Jaebin Ahn, Emre Alper, Michal Andrle, Elif Arbatli, Gavin Asdorian, Felicia Belostecinic, Diego Cerdeiro, Kevin Clinton, Vanessa Diaz Montelongo, Romain Duval, Rupa Duttagupta, Angela Espiritu, Rachel Yuting Fan, Emily Forrest, Mitko Grigorov, Refet Gürkaynak, Mahnaz Hemmati, Christian Henn, Benjamin Hilgenstock, Niko Hobdari, Ava Yeabin Hong, Keiko Honjo, Benjamin Hunt, Gabi Ionescu, Zoltan Matyas Jakab, Hao Jiang, Alimata Kini-Kaboré, Sinem Kılıç Çelik, Douglas Laxton, Andrei Levchenko, Olivia Ma, Trevor Charles Meadows, Juan Angel Garcia Morales, Brent Neiman, Emory Oakes, Evgenia Pugacheva, Rachel Szymanski, Daniel Te Kaat, Sheng Tibung, Nicholas Tong, Ali Uppal, Hou Wang, Niklas Westelius, Jilun Xing, Yuan Zeng, Fan Zhang, and Qiaoqiao Zhang.

    Joseph Procopio from the Communications Department led the editorial team for the report, with support from Michael Harrup and Christine Ebrahimzadeh and editorial assistance from Linda Kean, Lucy Scott Morales, Lorraine Coffey, Gregg Forte, EEI Communications, and AGS (an RR Donnelley Company).

    The analysis has benefited from comments and suggestions by staff members from other IMF departments, as well as by Executive Directors following their discussion of the report on September 23, 2016. However, both projections and policy considerations are those of the IMF staff and should not be attributed to Executive Directors or to their national authorities.

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