World Economic Outlook

Fiscal Policy and Macroeconomic Stability

May 2001

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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129k pdf Assumptions and Conventions
Chapter I.  
602k pdf file
Prospects and Policy Challenges

How Hard a Landing in the United States?

Will Japan's Fragile Recovery Continue?

Can Domestic Demand Sustain European Growth?

How Will the Global Slowdown Affect Asia?

How Will the Global Slowdown Affect Latin America?

Can Africa Achieve Sustained Higher Growth?

The Middle East: Managing Terms of Trade Volatility Rebalancing the Policy Mix in Europe's Emerging Markets

Commonwealth of Independent States: Oil Prices Are Key

Appendix I: The Global Slowdown and Commodity Prices

Appendix II: Reducing External Imbalances

  1.1   How Well Do Forecasters Predict Turning Points?
  1.2   Sustainability of the U.S. External Current Account
  1.3   Japan's Recent Monetary and Structural Policy Initiatives
  1.4   The Enhanced HIPC Initiative in Africa
Large Current Account Deficits in Transition Countries Seeking Membership in the European Union
  1.1   Overview of the World Economic Outlook Projections
  1.2   Selected Economies: Current Account Positions
  1.3   Major Advanced Economies: General Government Fiscal Balances and Debt
  1.4   Advanced Economies: Real GDP, Consumer Prices, and Unemployment
  1.5   Selected Asian Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.6   Selected Western Hemisphere Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.7   Emerging Market Economies: Net Capital Flows
  1.8   Selected African Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.9   Selected Middle Eastern Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.10   European Union Accession Candidates: Real GDP, Consumer Prices, and Current Account Balance
  1.11   Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance
  1.12   Alternative Scenario: Soft Landing with Imbalance Adjustment
  1.13   Alternative Scenario: Harder Landing
  1.1   Global Indicators
  1.2   Selected European Union Countries, Japan, and United States: Indicators of Consumer and Business Confidence
  1.3   Financial Market Developments
  1.4   External Vulnerabilities in Developing Countries
  1.5   United States: Sharp Slowdown and Persistent Imbalances
  1.6   Japan: Recovery Faltering
  1.7   Euro Area: Growth Moderating, but Still Reasonably Robust
  1.8   Selected Asian Countries: The Impact of Weakening External Demand
  1.9   Western Hemisphere: Exposure to External Shocks
  1.10   Sub-Saharan Africa: Why Has the Recent Expansion Slowed?
  1.11   Middle East: Responding to Oil Price Volatility
  1.12   Selected European Countries: Domestic Demand Growth and General Government Balances
  1.13   Russia: Recovery Driven by Exchange Rate Depreciation and Oil Prices
  1.14   Primary Commodity Prices and Selected Economic Indicators
  1.15   West Texas Oil: Spot Price and Futures Contacts
  1.16   Computer Chip Prices
  1.17   Global Imbalances Adjustment Scenarios
Chapter II.  
368k pdf file
Three Current Policy Issues

Impact of the Global Technology Correction on the
   Real Economy

What is Driving the Weakness of the Euro and the Strength
   of the Dollar?

Trade Integration and Sub-Saharan Africa

  2.1   The Weakness of the Australian and New Zealand Currencies
  2.2   Africa's Trade and the Gravity Model
  2.1   Change in Market Capitalization From March 2000 to March 2001
  2.2   Impact of a Rise in Equity Valuations on Consumption
  2.3   Impact of a Rise in Equity Valuations on Investment
  2.4   Are Stock Valuations a Leading Indicator of The Business Cycle?
  2.5   Explaining Bilateral Exchange Rate Movements
  2.6   Measures of Trade Policy Regimes in Africa and Other Regions: Sachs-Warner Openness Index
  2.7   Measures of Trade Policy Regimes in Africa and Other Regions: IMF's Trade Restrictiveness Index, 2000
  2.1   Equity Price Indices
  2.2   Stock Price Indices for Technology, Media, and Telecommunications (TMT) vs. Non-TMT Sector
  2.3   Correlation Between Technology, Media, and Telecommunications (TMT) and non-TMT Returns Across Regions
  2.4   Technology, Media, and Telecommunications (TMT) as a Share of GDP
  2.5   NASDAQ Stock Price and Private Fixed Investment in Computers and Peripheral Equipment
  2.6   The "New Economy" Cycle of the Late 1990s
  2.7   Movements of the Euro and Yen
  2.8   Global Net Portfolio Flows to the United States by Asset Class
  2.9   Net Portfolio Flows into U.S. Stocks from Euro Area and the Exchange Rate
  2.10   The Euro and Long-Term Interest Rate Differential
  2.11   Africa: Trade Indicators
  2.12   African Trade Arrangements: Intra and Extraregional Trade, 1980-98
  2.13   Africa: The Regional Trade Integration Quilt
Chapter III.  
333k pdf file
Fiscal Improvement In Advanced Economies: How Long Will It Last?

Fiscal Improvement in OECD Countries: A Retrospective

The Role of Institutional Reform

Future Fiscal Performance
  3.1   Japan: A Fiscal Outlier?
  3.2   Financial Implications of the Shrinking Supply of U.S. Treasury Securities
  3.3   Impact of Fiscal Consolidation on Macroeconomic Performance
  3.4   Fiscal Frameworks in Advanced and Emerging Market Economies
  3.1   Net Migration Flows to Major Industrial Economies in 2000 to 2050
  3.1   Fiscal Trends in OECD Countries
  3.2   Fiscal Developments in the OECD Area
  3.3   Fiscal Developments in Groups of OECD Countries
  3.4   Actual and Structural Balances in Groups of OECD Countries
  3.5   Expenditure Developments in Groups of OECD Countries
  3.6   Revenue Developments in Groups of OECD Countries
  3.7   Elderly Dependency Ratios
  3.8   Direct Effects of Aging on Government Finances
  3.9   Employment--Population Ratios by Age, Selected Countries, 1999
  3.10   Total Dependency Ratios
  3.11   Saving, Investment, and Current Account Balances in the Reference Scenario
Chapter IV.  
299k pdf file
The Decline of Inflation in Emerging Markets: Can It Be Maintained?

Why Do Countries Inflate?

Empirical Evidence on the Determinants of Inflation

What Explains the 1990s Inflation Performance in
   Emerging Markets?

Monetary Regimes and Inflation Performance

What Does the Recent Record Tell Us?

Safeguarding Low Inflation in Emerging Markets
  4.1   Why Emerging Market Countries Should Strive to Preserve Lower Inflation
  4.2   Is There a Relationship Between Fiscal Deficits and Inflation?
  4.3   Inflation Targeting in Emerging Market Economies: Implementation and Challenges
  4.1   Inflation in Industrial Countries and Emerging Markets
  4.2   Inflation in Emerging Markets
  4.3   Emerging Market Countries: Selected Variables
  4.4   Major Emerging Market Exchange-Rate and Money-Based Stabilization Programs Since the 1970s
  4.5   Fiscal Balances of Countries That Adopted Inflation Targeting
  4.1   Inflation Over Time
  4.2   Seigniorage in Emerging Market Economies, 1950­2000
  4.3   Inflation and Its Determinants in Emerging Markets
  4.4   Exchange Rate Pass-Through in Emerging Markets in the 1990s
  4.5   Monetary Regimes in Emerging Market Countries
  4.6   Foreign Currency Deposits
  4.7   Selected Exchange Rate Stabilization Programs, 1985-98
  4.8   Selected Monetary Stabilization Programs, 1975-90
555k pdf file
Summing Up by the Acting Chairman
  Statistical Appendix


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)
  A1   Economic Policy Assumptions Underlying the Projections for Selected Advanced Countries
497k pdf file World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics,