World Economic Outlook

Globalization and External Imbalances

April 2005

A Survey by the Staff of the International Monetary Fund

©2005 International Monetary Fund

Ordering Information

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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Webcasts—Technical Information

111 kb pdf file Assumptions and Conventions
Chapter I.
525 kb pdf file
Economic Prospects and Policies
United States and Canada: More Ambitious fiscal Consolidation is Needed in the United States
Western Europe: Renewed Concerns About the Strength of the Recovery
  Japan: Will Growth Resume?
  Emerging Asia and the Pacific: A Continuing Expansion, but External Surpluses Persist
  Latin America: Is Fiscal Policy on the Right Track at Last?
  Emerging Europe: Current Account Deficits Remain a Challenge
  Commonwealth of Independent States: Has Disinflation Bottomed Out?
  Africa: Turning the Corner?
  The Middle East: How Is the Recycling of Oil Revenues Affecting the Global Economy?
  Appendix 1.1 Recent Developments in Commodity Markets
Chapter II.
274 kb pdf file
Two Current Issues Facing Developing Countries
Workers' Remittances and Economic Development
  Output Volatility in Emerging Market and Developing Countries
Appendix 2.1. Workers' Remittances and Economic Development: Sample Composition, Data Sources, and Methods
  Appendix 2.2. Output Volatility in Emerging Market and Developing Countries: Country Coverage, Methodology, and Data
Chapter III.
311 kb pdf file
Globalization and External Imbalances
Financial Globalization
  Real Globalization
  The Effects of Globalization: An Integrated Perspective
  Summary and Policy Implications
  Appendix 3.1. Net Foreign Assets, Valuation, and Adjustment: A Glossary Of Terms
  Appendix 3.2. Econometric Evidence on the Valuation Channel
  Appendix 3.3. Details on Rigidities and Monetary Policy Rule Used in the GEM Simulation
Chapter IV.
272 kb pdf file
Will the Oil Market Continue to Be Tight?
Basic Stylized Facts
  Medium- and Long-Term Projections
  Conclusions and Policy Recommendations
  Appendix 4.1. Oil Market Prospects: Data and Modeling Strategy
56 kb pdf file Annex: Summing Up by the Acting Chair
376 kb pdf file Statistical Appendix

What's New


Data and Conventions


Classifications of Countries


List of Tables



Output (Tables 1-6)



Inflation (Tables 7-11)



Financial Policies (Tables 12-19)



Foreign Trade (Tables 20-24)



Current Account Transactions (Tables 25-31)



Balance of Payments and External Financing (Tables 32-34)



External Financing (Tables 35-36)



External Debt (Tables 37-42)


Flow of Funds (Table 43)



Medium-Term Baseline Scenario (Tables 44-45)

World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics
84 kb pdf file
  1.1 The Indian Ocean Tsunami: Impact on South Asian Economies
1.2 What Are the risks from Low U.S. Long-Term Interest Rates?
1.3 The Ending of Global Textile Trade Quotas
1.4 What Progress Has Been Made in Implementing Policies to Reduce Global Imbalances?
1.5 How Does Macroeconomic Instability Stifle Sub-Saharan African Growth?
1.6 How Should Middle Eastern and Central Asian Oil Exporters Use their Oil Revenues?
2.1 Workers' Remittances and Emigration in the Caribbean
  2.2 Regulating Remittances
2.3 Why Is Volatility Harmful?
  2.4 Balance of Payments Data on Workers' Remittances
3.1 External Imbalances Then and Now
3.2 Measuring a Country's Net External Position
3.3 Financial Globalization and the Conduct of Macroeconomic Policies
  3.4 Monetary Policy in a Globalized World
4.1 Should Countries Worry About Oil Price Fluctuations?
4.2 Data Quality in the Oil Market
  1.1 Overview of the World Economic Outlook Projections
  1.2 Emerging Market and Developing Countries: Net Capital Flows
  1.3 Major Advanced Economies: General Government Fiscal Balances and Debt
  1.4 Advanced Economies: Real GDP, Consumer Prices, and Unemployment
  1.5 Selected Economies: Current Account Positions
  1.6 Selected Asian Economies: Real GDP, Consumer Prices and Current Account Balance
  1.7 Selected Western Hemisphere Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.8 Emerging Europe: Real GDP, Consumer Prices, and Current Account Balance
  1.9 Commonwealth of Independent States: real GDP, Consumer Prices and Current Account Balance
  1.10 Selected African Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.11 Selected Middle Eastern Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.12 Global Oil Demand by Region
  1.13 Nonenergy Commodity Prices
  1.14 Relative Forecasting Performance: Futures Versus Random Walk Model
  2.1 Regression Results: Impact of Workers' Remittances
  2.2 Regression Results: Determinants of Workers' Remittances
  2.3 Contributors to Volatility in Real Per Capita Output Growth
  2.4 What Explains the Declines in Output Volatility Between 1970-86 and 1987-2004?
  2.5 Volatility Regression Results
  3.1 Gross Assets and Liabilities, 1980-2003
  3.2 Overseas Portfolio Investment
  3.3 Portfolio Diversification: Actual Foreign Shares and Benchmark Foreign Shares Implied by Other Countries' Share in World Market Portfolio
  3.4 Geography of Cross-Border Portfolio Equity Holdings
  3.5 Changes in Geographical Trade Patterns
  3.6 Trade Intensity
  3.7 Foreign Direct Investment Flows
  3.8 Differences in Parameters in Vintage Calibrations, 1980s and 2000s
  3.9 Impact of Risk Premium Shocks on Long-Run Trade Balances
  3.10 Panel VECM: Forecast Variance Decomposition
  3.11 Predictive Ability of Cointegrating Residuals
  3.12 Estimates of Nominal and Real Rigidities in an Earlier and a Later Sample
  3.13 Decomposition of Differences in Response Paths by Parameter Groups
  4.1 Unit Costs of Oil Production
  4.2 Oil Demand Projection
  4.2 Average Income Semi-Elasticities, 2003-30
  4.4 Projections of Non-OPEC Oil Supply
  4.5 Projected Oil Demand, Non-OPEC Supply, and Call on OPEC
  4.6 Estimated Demand Elasticities
  4.7 Demand Elasticities Used for Projections
  4.8 Vehicle Ownership and Income
  4.9 Vehicle Ownership Projections
  1.1 Global Indicators
  1.2 Current and Forward-Looking Indicators
  1.3 Global Exchange Rate Developments
  1.4 Global Inflation
  1.5 Developments in Mature Financial Markets
  1.6 Emerging Market Financial Conditions
  1.7 Global Outlook
  1.8 Fiscal and Monetary Policies in the Major Advanced Countries
  1.9 Household and Corporate Balance Sheets
  1.10 United States: Selected Financial and Economic Indicators
  1.11 Western Europe: Export Performance in Germany, France, and Italy
  1.12 Japan: Where Is the Economy in the Current Expansion?
  1.13 Emerging Asia: Current Accounts, Savings, and Investment
  1.14 Latin America: Fiscal Performance Is Improving, but Public Debt Remains Too High
  1.15 Emerging Europe: The Challenge of Current Account Deficits
  1.16 CIS: Has Disinflation Lost Momentum?
  1.17 Sub-Saharan Africa: Output Growth and Volatility
  1.18 Middle East: How Are OPEC Members Using the Higher Oil Revenues?
  1.19 Oil Prices, Future, and Production
  1.20 Commercial Oil Inventories and World Refinery Capacity
  1.21 Nonenergy Commodities
  1.22 Semiconductor Market
  1.23 Forecasting Crude Oil Spot Prices
  2.1 Workers' Remittances and Other Foreign Exchange Flows to Developing Countries
  2.2 Remittances: Sources and Destinations
  2.3 Developing Countries: 20 Largest Recipients of Remittances
  2.4 Remittances and Other Foreign Exchange Flows: Volatility and Cyclicality
  2.5 Cost of Sending $200 in Remittances from the United States
  2.6 Volatility of Output Growth
  2.7 Volatility of Output Growth by Region
  2.8 Global Factor and Actual Global Growth
  2.9 Regional Factors
  2.10 Contributors to Volatility in Real Per Capita Output Growth, 1970-2004
  2.11 Decompositions of Declines in Output Volatility Between 1970-86 and 1987-2003
  2.12 Response of the Volatility of Output Growth to a One-Standard-Deviation Increase in Terms-of-Trade Volatility
  2.13 Output Volatility and Improvements in Policies
  3.1 Financial Globalization Trends, 1970-2003
  3.2 Determinants of Financial Globalization
  3.3 External Current Account Balances and Net External Positions, 1970-2003
  3.4 Industrial Countries: Long-Term Real Interest Rates and Net Foreign Assets
  3.5 Valuation Effects on Net Foreign Assets
  3.6 Valuation Effects, Current Accounts, and Net Foreign Assets
  3.7 Valuation Changes in Net Foreign Assets and Real Effective Exchange Rates
  3.8 Selected Emerging Market Countries: Valuation Changes and Real Effective Exchange Rates
  3.9 Determinants of Real Globalization
  3.10 Degrees of Foreign Competition and Effective Exchange Rate in G-7 Countries
  3.11 Economies' Relative Sizes and Trade Patterns
  3.12 Global Rebalancing Under Benign Financial Market Conditions
  3.13 Global Rebalancing Under Adverse Financial Market Conditions
  4.1 Oil Market as a Source of Shocks
  4.2 Oil Consumption
  4.3 Oil Consumption per Unit of Output
  4.4 Oil Production and Reserves
  4.5 OPEC and Non-OPEC Oil Supply
  4.6 Long-Term Projections of Oil Demand
  4.7 Vehicle Ownership and Per Capita Income
  4.8 Profitability of Various OPEC Market Strategies
  4.9 Oil Demand in Advanced Economies
  4.10 Oil Demand in Emerging Market and Developing Countries
  4.11 Decomposition of Oil Price Movements