|1) Not all economies are included in the aggregations. Aggregates are computed on the basis of purchasing-power-parity (PPP) weights unless noted otherwise. 2) Argentina, Brazil, Bulgaria, Chile, China, Colombia, Estonia, Hungary, India, Indonesia, Latvia, Lithuania, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Romania, Russia, South Africa, Thailand, Turkey, Ukraine, and Venezuela. 3) Australia, Canada, Czech Republic, Denmark, euro area, Hong Kong SAR, Israel, Japan, Korea, New Zealand, Norway, Singapore, Sweden, Switzerland, Taiwan Province of China, United Kingdom, and United States. 4) PPP-weighted averages of metal products and machinery for Eurozone, plants and equipment for Japan, plants and machinery for the United Kingdom, and equipment and software for the United States.|
World Economic Outlook Update: The IMF
(International Monetary Fund) said today in Johannesburg, South Africa, that the
global economy will expand by 4½% in 2011 - - an upward revision of about ¼
percentage point relative to
the October 2010 World Economic Outlook
The Fund said in a mid-term update
of its biannual WEO, that the two-speed
recovery continues. In advanced economies, activity has moderated less than
expected, but growth remains subdued, unemployment is still high, and renewed
stresses in the Eurozone periphery are contributing to downside risks.
Meanwhile, in many emerging economies, activity remains buoyant, inflation
pressures are emerging, and there are now some signs of overheating, driven in
part by strong capital inflows.
The IMF says global activity expanded at an
annualized rate of just over 3½% in the third quarter of 2010. A slowdown from
the 5% growth rate of the second quarter of 2010 was expected, but the
third-quarter rate was better than forecast in the October 2010 WEO, owing to
stronger-than expected consumption in the United States and Japan.
The Fund says more generally, signs are
increasing that private consumption - - which fell sharply during the crisis - -
is starting to gain a foothold in major advanced economies. Meanwhile, growth in
emerging and developing economies remained robust in the third quarter, buoyed
by well entrenched private demand, still-accommodative policy stances, and
resurgent capital inflows.
The IMF says that activity in the advanced
economies is projected to expand by 2½% during 2011–12, which is still sluggish
considering the depth of the 2009 recession and insufficient to make a
significant dent in high unemployment rates. Nevertheless, the 2011 growth
projection is an upward revision of ¼ percentage point relative to the October
2010 WEO, mostly due to a new fiscal package passed in late 2010 in the United
States that is expected to boost economic growth this year by ½%. A package with
a similar growth impact passed in Japan is expected to sustain a moderate
recovery in 2011. And although growth in the periphery of the Eurozone is marked
down for this year, this is offset by an upward revision to growth in Germany,
due to stronger domestic demand.
The update says that in both 2011 and 2012,
growth in emerging and developing economies is expected to remain buoyant at
6½%, a modest slowdown from the 7% growth registered last year and broadly
unchanged from the October 2010 WEO.
Developing Asia continues to grow most rapidly,
but other emerging regions are also expected to continue their strong rebound.
Notably, growth in sub-Saharan Africa - - projected at 5½% in 2011 and 5¾% in
2012 - - is expected to exceed growth in all other regions except developing
Asia. This reflects sustained strength in domestic demand in many of the
region’s economies as well as rising global demand for commodities.
The Fund warns that the US fiscal deficit is
now projected at 10¾% in 2011 (more than double that in the Eurozone), and gross
government debt is projected to exceed 110% of GDP in 2016. The economists
say that an absence of a credible, medium-term fiscal strategy would eventually
drive up U.S. interest rates, which could prove disruptive for global financial
markets and for the world economy.
World Economic Outlook Update