## weo

## Source details

**Canonical URL:** [weo](https://www.imf.org/-/media/files/publications/reo/mcd-cca/2016/october/weo.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/reo/mcd-cca/2016/october/weo.pdf.md)
- [Structured JSON version](/-/media/files/publications/reo/mcd-cca/2016/october/weo.pdf.json)

---

### Global outlook and downside risks
- The global recovery remains subdued in the context of significant downside risks.
- Underlying factors shaping the outlook include: ongoing realignments such as the rebalancing in China and the decline in commodity prices; slow productivity growth; unfavorable demographic trends; new shocks such as Brexit—the vote in June by the United Kingdom to leave the European Union; and non-economic factors such as political uncertainty, global conflicts, and refugee crises.
- These factors imply a generally muted baseline for growth forecasts and substantial uncertainty about economic prospects.
- Financial market reaction to the result of the U.K. referendum has been contained, but the increase in economic, political and institutional uncertainty is expected to have negative macroeconomic consequences, especially in the United Kingdom.

### Short-term projections and key statistics
- Global growth is projected to slow to 3 percent in 2016.
- Global growth is projected to strengthen to 3½ percent in 2017, contingent on rising growth in emerging market and developing economies.
- Advanced economies:
  - Growth is projected to slow to 1½ percent in 2016.
  - Growth is projected at 1¾ percent in 2017.
  - The United States: 1.6 percent in 2016; 2.2 percent in 2017.
  - European Union: 1.9 percent in 2016; 1.7 percent in 2017.
- Emerging market and developing economies:
  - Growth is expected to marginally strengthen to 4.1 percent in 2016.
  - Growth is projected to increase to 4½ percent in 2017.
  - These countries account for three-quarters of the world’s projected growth in 2016.
- Country/group-specific notes:
  - MENAP: 3.4 percent in 2016; 3.4 percent in 2017.
  - CCA: 1.3 percent in 2016; 2.6 percent in 2017.
  - Commonwealth of Independent States: –0.3 percent in 2016; 1.4 percent in 2017.
  - Russia: –0.8 percent in 2016; 1.1 percent in 2017.
- World trade volume (goods and services): 2.6 percent in 2015; 3.2 percent in 2016; 3.8 percent in 2017.
- Commodity prices:
  - Oil: –47.2 in 2015; –15.4 in 2016; 17.9 in 2017.
  - Nonfuel: –17.5 in 2015; –2.7 in 2016; 0.9 in 2017.
- Oil price footnote details:
  - The average price of oil in U.S. dollars a barrel was $50.79 in 2015; the assumed price based on future markets is $42.96 in 2016 and $50.64 in 2017.
- World output (annual percent change) from the WEO table:
  - 2015: 3.2
  - 2016: 3.1
  - 2017: 3.4
- Advanced economies (annual percent change) from the WEO table:
  - 2015: 2.1
  - 2016: 1.6
  - 2017: 1.8
- Emerging and developing economies (annual percent change) from the WEO table:
  - 2015: 4.0
  - 2016: 4.2
  - 2017: 4.6

### Medium- and longer-term prospects
- Longer-term prospects for advanced economies remain muted, given demographic headwinds and weak productivity growth.
- Growth in emerging market and developing economies is expected to strengthen further over the medium term, conditional on:
  - gradual normalization of conditions in economies currently under stress,
  - a general pickup in growth in commodity exporters,
  - a continued rebalancing of China’s economy,
  - resilient growth in other emerging market and developing countries.

### Policy priorities and recommendations
- Global: urgent action relying on all policy levers is needed to head off further growth disappointments, combat damaging perceptions that policies are ineffective, and that rewards accrue only to those at the higher end of the income distribution.
- Advanced economies:
  - Support near-term demand through accommodative monetary policy and supportive fiscal stance—calibrated to the amount of fiscal space available.
  - Implement measures to lift potential growth.
  - In some cases, strengthen bank and corporate balance sheets.
- Emerging market and developing economies:
  - Maintain income convergence by reducing distortions in product, labor, and capital markets.
  - Address financial vulnerabilities.
  - Invest in education and health care.
- Low-income developing economies:
  - Rebuild policy buffers while preserving critical capital expenditures and social outlays.
- Structural reforms: implementation would pave the way for economic diversification and higher productivity.
- Multilateral actions: continue efforts to address the backlash against global trade, establish effective banking resolution frameworks, and build a stronger global safety net.

*Sources: IMF, World Economic Outlook (October 2016) and Regional Economic Outlook: Middle East and Central Asia (October 2016).*

---


_Source: https://www.imf.org/-/media/files/publications/reo/mcd-cca/2016/october/weo.pdf_