World Economic Outlook

World Economic Outlook

Focus on Transition Economies

September 2000

A Survey by the Staff of the International Monetary Fund
©2000 International Monetary Fund

The World Economic Outlook presents the IMF staff’s analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF’s global surveillance activities.

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Contents
Assumptions and Conventions
Preface
Chapter I.   505k pdf file	Prospects and Policy Challenges Can the United States Achieve a "Soft Landing"? Maintaining the Expansion in Europe Regaining the Confidence of Japan's Consumers Latin America and the Carribean: Recovery and    Divergence Asia: Continuing Strong Expansion Commonwealth of Independent States: Will    Macroeconomic Improvements Accelerate    Structural Reform? Sustaining the Momentum in Countries on the European Union Accession Track Middle East and Africa: Recovering But Vulnerable to    Commodity Price Cycles The Transition Process Appendix I: Alternative Scenarios Appendix II: The Global Current Account Discrepancy
	Boxes
	1.1	Why is the Euro so Undervalued?
	1.2	Risky Business: Output Volatility and the Perils of Forecasting in Japan
	1.3	China's Prospective WTO Accession
	1.4	The Economic Impact of HIV/AIDS in Southern Africa
	Tables
	1.1	Overview of the World Economic Outlook Projections
	1.2	Selected Economies: Current Account Positions
	1.3	Advanced Economies: Real GDP, Consumer Prices, and Unemployment
	1.4	Major Industrial Countries: General Government Fiscal Balances and Debt
	1.5	Selected Western Hemisphere and Asian Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.6	Commonwealth of Independent States and Countries on the European Union Accession Track: Real GDP, Consumer Prices, and Current Account Balance
	1.7	Selected Middle Eastern and African Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.8	Alternative Scenario: Harder Landing
	1.9	Alternative Scenario: Faster Growth in Euro Area and Japan
	Figures
	1.1	Global Indicators
	1.2	World Industrial Production
	1.3	A Comparison of Global Growth in Recent Slowdowns
	1.4	Major Industrial Countries: Output Gaps
	1.5	United States: Rapid Growth, But Rising Imbalances
	1.6	Euro Area: A Strengthening Expansion Will Allow Accelerated Reform
	1.7	Japan: Modest Recovery But Consumption Still Weak
	1.8	Selected Latin American Countries: Financial Developments
	1.9	Selected East Asian Countries: Real GDP Growth and Its Composition
	1.10	Russia: Signs of a Strong Recovery
	1.11	Selected European Countries: Export Market Growth and Real Effective Exchange Rates
	1.12	Africa and the Middle East: Terms of Trade Impact of Commodity Price Changes
	1.13	Global Current Account Discrepancy
Chapter II.   397k pdf file	Current Issues in the World Economy Productivity Growth and IT in the Advanced    Economies Developments in Global Equity Markets International Capital Flows to Emerging Markets Commodity Prices and Commodity Exporting    Countries
	Boxes
	2.1	U.S. Monetary Policy and Sovereign Spreads in Emerging Markets
	2.2	Developments in the Oil Markets
	Tables
	2.1	United States: Sources of the Acceleration in Labor-Productivity Growth, 1974–99
	2.2	Market Capitalization of Information Technology Stocks as a Share of Total Market Capitalization
	2.3	Decomposition of the IT Sector into Telecommunications and Computer Subsectors
	2.4	International Correlations of Stock Price Changes
	2.5	Gross Private Financing to Emerging Market Economies
	2.6	Emerging Market Economies: Net Capital Flows
	2.7	General Government Balance
	2.8	External Debt
	2.9	Selected Primary Commodities: Recent Price Movements
	2.10	Nonfuel Commodity Exporters: Export Dependency and Terms of Trade
	2.11	Fuel Exporters: Export Dependency and Terms of Trade
	2.12	Preliminary Estimates of a First Round Effect of an Oil Price Increase in Oil Importing Developing Countries
	2.13	Macroeconomic Impact of a Ten Percent Increase in Oil Prices
	Figures
	2.1	Faster-Growing Advanced Economies: Output, Employment, and Productivity Growth in the Business Sector
	2.2	Advanced Economies: Expenditure and Production of Information and Communications Technology, 1997
	2.3	Illustrative Country Scenario: New Economy Uncertainty and Monetary Policy
	2.4	Equity Price Indices
	2.5	Price-Earnings Ratios for Information Technology (IT) vs. Non-IT Sector
	2.6	Selected Regions: Equity Price 12-Month Volatility
	2.7	Market Value of Information Technology Stocks, 1999
	2.8	Emerging Markets: Bond Spreads
	2.9	Emerging Markets: Capital Flows, Bond Spread, and Volatility in Equity Returns
	2.10	Selected East Asian and Latin American Economies: Current Account Balance
	2.11	Selected Emerging Market Economies: Capital Flows
	2.12	Prices of Crude Petroleum and Nonfuel Commodities
Chapter III.   452k pdf file	Transition: Experience and Policy Issues Transition Experience to Date Explaining Differences in Performance and Resulting    Policy Lessons Policy Agenda for the Future Reinforcing the Momentum of Structural and    Institutional Reform Appendix: Indicators of Structural Reform and    Institutional Quality
	Boxes
	3.1	The IMF and the Transition Economies
	3.2	Transition Controversies
	3.3	Addressing Barter Trade and Arrears in Russia
	3.4	Privatization in Transition Economies
	3.5	Fiscal Decentralization in Transition Economies: China and Russia
	Tables
	3.1	Selected Characteristics of Transition Countries
	3.2	Transition Economies: Alternative Geographic, Political, and Reform-Effort Groupings
	3.3	Foreign Indebtedness, 1999
	3.4	Countries' Institutional Quality: Quintiles, 1997–98
	3.5	Proxy Measures of Human Capital
	3.6	Initial Conditions
	3.7	Areas of Remaining Major Reform Backlog
	3.8	Transition Economies' Membership in International Organizations
	3.9	EBRD Transition Indicators, 1999
	3.10	Liberalization Index
	3.11	Index of Institutional Quality, 1997–98
	3.12	Correlation Among Indices
	Figures
	3.1	Key Elements of Reform in Transition
	3.2	Progress in Structural Reform and Output Performance
	3.3	Output and Inflation Performance During Transition
	3.4	Real GDP Ratio, 2000 to 1989
	3.5	Macrostabilization: Budget Deficit and Inflation, 2000
	3.6	Change in Poverty and Income Distribution
	3.7	Progress in Reform by Area, 1999
	3.8	Aggregate EBRD Transition Indicator, 1999
	3.9	Index of Institutional Quality, 1997–98
	3.10	Progress in Structural Adjustment
	3.11	Adjustment Gap of Regional Export Structure
	3.12	Current Account Deficit and Foreign Direct Investment, 1999
	3.13	Composition of Net Capital Flows
	3.14	Government Revenue and Expenditure, 1999
	3.15	Financial Maturity Indicators, 1994–99
	3.16	Trade-Weighted Real GDP Growth of Trading Partners
Chapter IV.   362k pdf file	Accession of Transition Economies to the European Union: Prospects and Pressures Where Do the CEECs Stand on the Road to    Accession? Accession and Convergence: Costs, Benefits,    and Risks Challenges for the EU as it Prepares for Enlargement Conclusions and Policy Implications
	Boxes
	4.1	Formalities and Procedures of EU Enlargement
	4.2	Previous EU Enlargements
	4.3	Accession of Turkey to the European Union
	4.4	Convergence and Real Exchange Rate Appreciation in the EU Accession Countries
	Tables
	4.1	Central and Eastern European Countries: Macroeconomic Indicators
	4.2	Selected European Countries: Economic Indicators
	4.3	Selected European Countries: Sectoral Value Added
	4.4	Selected European Countries: Indicators of Health and Education
	4.5	Selected European Countries: Correlation of Output and Inflation, 1993–99
	4.6	Legal Transition Indicators
	4.7	Selected European Countries: Trade
	4.8	Central and Eastern European Countries: External Account Liberalization
	4.9	Comparative Market Development Data for Selected Accession Countries: Market Regulation and Supervision
	4.10	Estimates of Labor Market Flexibility
	4.11	The European Social Charter and the Labor Market
	4.12	Hungary: EU-Related Spending and Financing
	4.13	Exchange Rate Arrangements and Anchors of Monetary Policy
	Figures
	4.1	Private Sector Share of Output, mid-1999
	4.2	Indicators of Transition, 1999
	4.3	Indicators of Institutional Development
	4.4	Export Markets
	4.5	Financing the Current Account Deficit, 1999
	4.6	Government Expenditures in Relation to GDP Per Capita, 1999
Annex 554k pdf file	Summing Up by the Chairman
	Statistical Appendix Assumptions Data and Conventions Classification of Countries List of Tables    Output (Tables 1–7)    Inflation (Tables 8–13)    Financial Policies (Tables 14–21)    Foreign Trade (Tables 22–26)    Current Account Transactions (Tables 27–32)    Balance of Payments and External Financing       (Tables 33–37)    External Debt and Debt Service (Tables 38–43)    Flow of Funds (Tables 44)    Medium-Term Baseline Scenario (Tables 45–46)
	Box
	A1	Economic Policy Assumptions Underlying the Projections for Selected Advanced Countries
World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics, 1992–2000