Statistical Appendix
Author: International Monetary Fund. Research Dept.
Language:
English
Keywords:
WEO; emerging market; current account; oil price; trade balance; market; external borrowing; factor income; potential GDP; long-term debt; net credit; Imports; Middle East; Asia and Pacific; Africa; economic statistics; Exports
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Abstract

The statistical appendix presents historical data, as well as projections. It comprises five sections: Assumptions, What’s New, Data and Conventions, Classification of Countries, and Statistical Tables.

The statistical appendix presents historical data, as well as projections. It comprises five sections: Assumptions, What’s New, Data and Conventions, Classification of Countries, and Statistical Tables.

The assumptions underlying the estimates and projections for 2006–07 and the medium-term scenario for 2008–11 are summarized in the first section. The second section presents a brief description of changes to the database and statistical tables. The third section provides a general description of the data, and of the conventions used for calculating country group composites. The classification of countries in the various groups presented in the World Economic Outlook is summarized in the fourth section.

The last, and main, section comprises the statistical tables. Data in these tables have been compiled on the basis of information available through early April 2006. The figures for 2006 and beyond are shown with the same degree of precision as the historical figures solely for convenience; since 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 during the period February 9 to March 9, 2006. For 2006 and 2007, these assumptions imply average U.S. dollar/SDR conversion rates of 1.438 and 1.441, U.S. dollar/euro conversion rate of 1.19 and 1.20, and yen/U.S. dollar conversion rates of 116.9 and 115.9, respectively.

It is assumed that the price of oil will average $61.25 a barrel in 2006 and $63.00 a barrel in 2007.

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

Economic Policy Assumptions Underlying the Projections for Selected Advanced Economies

The short-term fiscal policy assumptions used in the World Economic Outlook 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. In cases where 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 otherwise indicated. Specific assumptions used in some of the advanced economies follow (see also Tables 12–14 in the Statistical Appendix for data on fiscal and structural balances).1

United States. The fiscal projections are based on the Administration’s FY2007 Budget (February 6, 2006), adjusted to take into account differences in macroeconomic projections as well as staff assumptions about (1) additional defense spending based on analysis by the Congressional Budget Office; (2) slower compression in the growth rate of discretionary spending; (3) government spending for the clean-up and reconstruction in areas damaged by Hurricane Katrina; and (4) alternative minimum tax (AMT) reform beyond FY2007.

Japan. The medium-term fiscal projections assume that expenditure and revenue of the general government (excluding social security) are adjusted in line with the current government target to achieve a primary fiscal balance by the early 2010s.

Germany. Official estimates were used for 2005. For 2006–2011, the World Economic Outlook projections reflect measures as announced in the new government’s coalition agreement. These aim to reduce the overall fiscal balance to below 3 percent of GDP in 2007, centered around a 3 percent increase in the value added tax, or VAT (as of January 2007).

France. The projections for 2006 are based on the initial budget adjusted for the IMF staff’s macro-economic assumptions. For 2007–09, the projections are based on the intentions underlying the 2007–09 Stability Program Update adjusted for the IMF staff’s macroeconomic assumptions, lower projections for nontax revenue, unchanged tax policy beyond 2007, and a less sharp deceleration in spending growth than projected by the authorities beyond 2007. For 2010–11, the IMF staff assumes unchanged tax policies and real expenditure growth as in the 2009 projection.

Italy. Fiscal projections from 2007 onward are based on a technical assumption of a constant primary structural balance net of one-off measures. They do not incorporate measures that would be adopted in the 2007 budget.

United Kingdom. The fiscal projections are based on information provided in the 2006 Budget Report. Additionally, the projections incorporate the most recent statistical releases from the Office for National Statistics, including provisional budgetary outturns through 2005:Q4. The computation of the structural fiscal balance is based on staff projections of the output gap.

Canada. Projections are based on costing of the new government’s program provided during the recent election campaign, which were examined for accuracy by Canada’s Conference Board (http://www.conservative.ca/media/20060113-FiscalPlan.pdf).

Australia. The fiscal projections through the fiscal year 2008/09 are based on the 2005–06 Mid-Year Economic and Fiscal Outlook published in December 2005. For the remainder of the projection period, the IMF staff assumes unchanged policies.

Austria. Fiscal figures for 2005 are based on the authorities’ estimated outturn. Projections for 2006 are based on this year’s budget. Projections for 2007–08 are based on the Austrian Stability Program. For 2009–11, projections assume unchanged overall and structural balances from those in 2008.

Belgium. The projections for 2006 are based on the 2006 budget adjusted for the IMF staff’s macro-economic assumptions and an assumed lower yield of some specific items. For 2007–11, the projections assume unchanged tax policies and real primary expenditure growth as in the recent past.

Denmark. Estimates for 2005 are aligned with the latest official projections and budget, adjusted for the IMF staff macroeconomic projections. For 2006–11, projections are in line with the authorities’ medium-term framework—adjusted for the IMF staff macroeconomic projections—targeting an average budget surplus of 1.5–2.5 percent of GDP, supported by a ceiling on real public consumption growth.

Greece. Projections are based on the 2006 budget, adjusted for IMF staff projections for economic growth. For 2007 and beyond, tax revenues as a percent of GDP are assumed constant, while social insurance contributions are assumed to continue their trend increase and EU transfers are assumed to decline. Total expenditure is assumed to remain broadly constant as a percent of GDP.

Korea. Estimates for 2005 are based on the initial budget adjusted for the latest official estimates of some components. Projections for 2006 are based on the authorities’ budget. For 2007–09, projections are in line with the authorities’ National Fiscal Management Plan. For 2010–11, IMF staff assumes unchanged revenue and expenditure growth from the 2007–09 projections.

Netherlands. The fiscal projections for 2006 and beyond build on the 2006 budget, the latest Stability Program, and other forecasts provided by the authorities, adjusted for the IMF staff’s macro-economic assumptions.

New Zealand. The fiscal projections through the fiscal year 2009/10 are based on the 2005 Half Year Economic and Fiscal Update published in December 2005. For the remainder of the projection period, the IMF staff assumes unchanged policies.

Portugal. Fiscal projections for 2006 build on the authorities’ budget. Projections for 2007 and beyond are based on the current Stability and Growth Program by the authorities.

Spain. Fiscal projections through 2008 are based on the policies outlined in the national authorities’ updated Stability Program of December 2005. These projections have been adjusted for the IMF staff’s macroeconomic scenario. In subsequent years, the fiscal projections assume no significant changes in these policies.

Sweden. The fiscal projections are based on information provided in the budget, presented on September 20, 2005. Additionally, the projections incorporate the most recent statistical releases from Statistics Sweden, including provisional budgetary outturns through December 2005.

Switzerland. Estimates for 2005 and projections for 2006–11 are based on IMF staff calculations, which incorporate measures to restore balance in the Federal accounts and strengthen the social security finances.

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 therefore increase when economic indicators suggest that prospective inflation will rise above its acceptable rate or range, and they will decrease when indicators suggest that prospective inflation will not exceed the acceptable rate or range, that prospective output growth is below its potential rate, and that the margin of slack in the economy is significant. On this basis, the LIBOR on six-month U.S. dollar deposits is assumed to average 5.0 percent in 2006 and 5.1 percent in 2007. The projected path for U.S. dollar short-term interest rates reflects the assumption implicit in prevailing forward rates. The rate on three-month euro deposits is assumed to average 3.0 percent in 2006 and 3.4 percent in 2007. The interest rate on six-month Japanese yen deposits is assumed to average 0.3 percent in 2006 and 0.9 percent in 2007. Changes in interest rate assumptions compared with the September 2005 World Economic Outlook are summarized in Table 1.1.

1 The output gap is actual less potential output, as a percent of potential output. Structural balances are expressed as a percent of potential output. The structural budget balance is the budgetary position that would be observed if the level of actual output coincided with potential output. Changes in the structural budget balance consequently include effects of temporary fiscal measures, the impact of fluctuations in interest rates and debt-service costs, and other noncyclical fluctuations in the budget balance. The computations of structural budget balances are based on IMF staff estimates of potential GDP and revenue and expenditure elasticities (see the October 1993 World Economic Outlook, Annex I). Net debt is defined as gross debt less financial assets of the general government, which include assets held by the social security insurance system. Estimates of the output gap and of the structural balance are subject to significant margins of uncertainty.

With regard to interest rates, it is assumed that the London interbank offered rate (LIBOR) on six-month U.S. dollar deposits will average 5.0 percent in 2006 and 5.1 percent in 2007, that three-month euro deposits will average 3.0 percent in 2006 and 3.4 percent in 2007, and that six-month Japanese yen deposits will average 0.3 percent in 2006 and 0.9 percent in 2007.

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 states adopting the euro are as follows.

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See Box 5.4 in the October 1998 World Economic Outlook for details on how the conversion rates were established.

What’s New

The country composition of the fuel-exporting group has been revised to reflect the periodic update of the classification criteria; and the purchasing-power-parity (PPP) weights have been updated to reflect the most up-to-date PPP conversion factor provided by the World Bank.

Data and Conventions

Data and projections for 175 countries form the statistical basis for the World Economic Outlook (the World Economic Outlook database). The data are maintained jointly by the IMF’s Research Department and area 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 national compilation of statistics, including the analytical frameworks, concepts, definitions, classifications, and valuation procedures used in the production of economic statistics. The World Economic Outlook database reflects information from both national source agencies and international organizations.

The comprehensive revision of the standardized System of National Accounts 1993 (SNA), the IMF’s Balance of Payments Manual, Fifth Edition (BPM5),the Monetary and Financial Statistics Manual (MFSM), and the Government Finance Statistics Manual 2001 (GFSM 2001) represented important improvements in the standards of economic statistics and analysis.2 The IMF was actively involved in all these projects, particularly the new Balance of Payments Manual, which reflects the IMF’s special interest in countries’ external positions. Key changes introduced with the new Manual were summarized in Box 13 of the May 1994 World Economic Outlook. The process of adapting country balance of payments data to the definitions of the new BPM5 began with the May 1995 World Economic Outlook. However, full concordance with the BPM5 is ultimately dependent on the provision by national statistical compilers of revised country data, and hence the World Economic Outlook estimates are still only partially adapted to the BPM5.

In line with recent improvements in standards of reporting economic statistics, several countries have phased out their traditional fixed base-year method of calculating real macro-economic variables levels and growth by switching to a chain-weighted method of computing aggregate growth. Recent dramatic changes in the structure of these economies have obliged these countries to revise the way in which they measure real GDP levels and growth. Switching to the chain-weighted method of computing aggregate growth, which uses current price information, allows countries to measure GDP growth more accurately by eliminating upward biases in new data.3 Currently, real macroeco-nomic data for Australia, Austria, Azerbaijan, Canada, Czech Republic, euro area, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Portugal, Spain, Sweden, the United Kingdom, and the United States are based on chain-weighted methodology. However, data before 1988 (Austria), 2000 (Azerbaijan), 1995 (Czech Republic), 1995 (euro area), 1991 (Germany), 2000 (Greece), 1990 (Iceland), 1997 (Ireland), 2001 (Italy), 1994 (Japan), 1995 (Luxembourg), 2001 (the Netherlands), 1995 (Portugal), and 1995 (Spain) are based on unrevised national accounts and subject to revision in the future.

The members of the European Union have adopted a harmonized system for the compilation of the national accounts, referred to as ESA 1995. All national accounts data from 1995 onward are presented on the basis of the new system. Revision by national authorities of data prior to 1995 to conform to the new system has progressed, but has in some cases not been completed. In such cases, historical World Economic Outlook data have been carefully adjusted to avoid breaks in the series. Users of EU national accounts data prior to 1995 should nevertheless exercise caution until such time as the revision of historical data by national statistical agencies has been fully completed. See Box 1.2, “Revisions in National Accounts Methodologies,” in the May 2000 World Economic Outlook.

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

  • Country group composites for exchange rates, interest rates, and the 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 parities (PPPs) as a share of total world or group GDP.4

  • Composites for data relating to the domestic economy for the euro area (12 member countries throughout the entire period unless otherwise noted) are aggregates of national source data using weights based on 1995 ECU exchange rates.

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

  • Composites relating to the external economy 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 percentage changes for individual countries weighted by the U.S. dollar value of exports or imports as a share of total world or group exports or imports (in the preceding year). For central and eastern European countries,

external transactions in nonconvertible currencies (through 1990) are converted to U.S. dollars at the implicit U.S. dollar/ruble conversion rates obtained from each country’s national currency exchange rate for the U.S. dollar and for the ruble.

Classification of Countries

Summary of the Country Classification

The country classification in the World Economic Outlook divides the world into two major groups: advanced economies, and other emerging market and developing countries.5 Rather than being based on strict criteria, economic or otherwise, this classification has evolved over time with the objective of facilitating analysis by providing a reasonably meaningful organization of data. A few countries are presently not included in these groups, either because they are not IMF members and their economies are not monitored by the IMF, or because databases have not yet been fully developed. Because of data limitations, group composites do not reflect the following countries: The Islamic Republic of Afghanistan, Bosnia and Herzegovina, Brunei Darussalam, Eritrea, Liberia, Serbia and Montenegro, Somalia, and Timor-Leste. Cuba and the Democratic People’s Republic of Korea are examples of countries that are not IMF members, whereas San Marino, among the advanced economies, and Aruba, among the developing countries, are examples of economies for which databases have not been completed.

Each of the two main country groups is further divided into a number of subgroups. Among the advanced economies, the seven largest in terms of GDP, collectively referred to as the major advanced countries, are distinguished as a subgroup, and so are the 12 members of the euro area and the four newly industrialized Asian economies. The other emerging market and developing countries are classified by region, as well as into a number of analytical groups. Table A provides an overview of these standard groups in the World Economic Outlook, showing the number of countries in each group and the average 2005 shares of groups in aggregate PPP-valued GDP, total exports of goods and services, and population.

Table A.

Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 20051

(Percent of total for group or world)

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The GDP shares are based on the purchasing-power-parity (PPP) valuation of country GDPs. The number of countries comprising each group reflects those for which data are included in the group aggregates.

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

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

Advanced Economies

The 29 advanced economies are listed in Table B. The seven largest in terms of GDP—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 (G-7) countries. The euro area (12 countries) and the newly industrialized Asian economies are also distinguished as subgroups. 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

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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.

In 1991 and subsequent years, data for Germany refer to west Germany and the eastern Länder (i.e., the former German Democratic Republic). Before 1991, economic data are not available on a unified basis or in a consistent manner. Hence, in tables featuring data expressed as annual percent change, these apply to west Germany in years up to and including 1991, but to unified Germany from 1992 onward. In general, data on national accounts and domestic economic and financial activity through 1990 cover west Germany only, whereas data for the central government and balance of payments apply to west Germany through June 1990 and to unified Germany thereafter.

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

Table C.

European Union

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Other Emerging Market and Developing Countries

The group of other emerging market and developing countries (146 countries) includes all countries that are not classified as advanced economies.

The regional breakdowns of other emerging market and developing countries—Africa, central and eastern Europe, Commonwealth of Independent States, developing Asia, Middle East, and Western Hemisphere—largely conform to the regional breakdowns in the IMF’s International Financial Statistics. In both classifications, Egypt and the Libyan Arab Jamahiriya are included in the Middle East region rather than in Africa. In addition, the World Economic Outlook sometimes refers to the regional group of Middle East and North Africa countries, also referred to as the MENA countries, whose composition straddles the Africa and Middle East regions. This group is defined as the Arab League countries plus the Islamic Republic of Iran (see Table D).

Table D.

Middle East and North Africa Countries

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Other emerging market and developing countries are also classified according to analytical criteria. The analytical criteria reflect countries’ composition of export earnings and other income from abroad, exchange rate arrangements, a distinction between net creditor and net debtor countries, and, for the net debtor countries, financial criteria based on external financing source and experience with external debt servicing. The detailed composition of other emerging market and developing countries in the regional and analytical groups is shown in Tables E and F.

Table E.

Other Emerging Market and Developing Countries by Region and Main Source of Export Earnings

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Table F.

Other Emerging Market and Developing Countries by Region, Net External Position, and Heavily Indebted Poor Countries

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Dot instead of star indicates that the net debtor’s main external finance source is official financing.

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

The analytical criterion, by source of export earnings, distinguishes between categories: fuel (Standard International Trade Classification— SITC 3) and nonfuel and then focuses on nonfuel primary products (SITC 0, 1, 2, 4, and 68).

The financial criteria focus on net creditor, net debtor countries, and heavily indebted poor countries (HIPCs). Net debtor countries are further differentiated on the basis of two additional financial criteria: by official external financing and by experience with debt servicing.6 The HIPC group comprises the countries considered by the IMF and the World Bank for their debt initiative, known as the HIPC Initiative, with the aim of reducing the external debt burdens of all the eligible HIPCs to a “sustainable” level in a reasonably short period of time.7

Medium-Term Baseline Scenario

Table 1.

Summary of World Output1

(Annual percent change)

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Real GDP.

In this table, “other advanced economies” means advanced economies excluding the United States, euro area countries, and Japan.

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

Table 2.

Advanced Economies: Real GDP and Total Domestic Demand

(Annual percent change)

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From fourth quarter of preceding year.