World Economic Outlook

Sustaining the Recovery

October 2009

World Economic and Financial Surveys

©2009 International Monetary Fund
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The World Economic Outlook (WEO) 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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  Assumptions and Conventions
Joint Foreword to World Economic Outlook and Global Financial Stability Report
Executive Summary
Chapter 1. Global Prospects and Policies
Full Text  |  Boxes  |   Figures

The Global Recession Is Ending

Deleveraging and Slow Job Growth Ahead

Improving, but Still Difficult, Financial Conditions

Sluggish Real Sector Dynamics

Continued, but Diminishing, Support from Policy

A Subdued Recovery and Vulnerability to Mild Deflation

Beyond 2010: How Will the Global Economy Rebalance?

Risks to a Sustained Recovery

Policy Challenges: Reconciling Short- and Medium-Term Objectives

Appendix 1.1. Commodity Market Developments and Prospects


Chapter 2. Country and Regional Perspectives
Full Text  |   Figures

The U.S. Economy is Stabilizing as the Crisis Subsides

Asia: From Rebound to Recovery?

Europe: A Sluggish Recovery Lies Ahead

Commonwealth of Independent States: A Difficult Recovery for Some and Damage Containment for Others

Other Advanced Economies: On the Path to Recovery

Latin America and the Caribbean: Policy Frameworks Have Promoted Resilience

Middle East: Strengthening Growth Prospects

Africa: Regaining Momentum

Chapter 3. Lessons for Monetary Policy from Asset Price Fluctuations
Full Text  |   Summary  |   Figures

Asset Price Busts in the Modern Era

Macroeconomic Patterns ahead of the Current Crisis

The Role of Monetary Policy

Should Policymakers React to Asset Market Fluctuations?

Policy Conclusions

Appendix 3.1 Econometric Methods

Appendix 3.2 Data Sources


Chapter 4. What's the Damage? Medium-Term Output Dynamics after Financial Crises
Full Text  |   Summary  |   Boxes  |   Figures

Does Output Recover over the Medium Term?

Decompositions: Why Does Aggregate Output Fail to Recover after a Banking Crisis?

What Factors Are Associated with Medium-Term Output Losses?

Implications for the Outlook after the Current Financial Crisis

Appendix 4.1 Data Sources and Methodologies


  Annex: IMF Executive Board Discussion of the Outlook, September 2009
  Statistical Appendix
  What's New
  Data and Conventions
  Classification of Countries
  General Features and Composition of Groups in the World Economic Outlook Classification
List of Tables Part A
  Output (Tables A1–A4)
  Inflation (Tables A5–A7)
  Financial Policies (Table A8)
  Foreign Trade (Table A9)
  Current Account Transactions (Tables A10–A12)
  Balance of Payments and External Financing (Tables A13–
  Flow of Funds (Table A16)
  Medium–Term Baseline Scenario (Table A17)
  List of Tables Part B (available on the web only)
  Output (Tables B1–B2)
  Inflation (Tables B3–B4)
  Financial Policies (Tables B5–B10)
  Foreign Trade (Tables B11–B13)
  Current Account Transactions (Tables B14–B17)
  Balance of Payments and External Financing (Tables B18–B20)
  External Debt and Debt Service (Tables B21–B25)
  Medium-Term Baseline Scenario (Table B26)
  World Economic Outlook, Selected Topics
1.1 Trade Finance and Global Trade: New Evidence from Bank Surveys
1.2 Were Financial Markets in Emerging Economies More Resilient than in Past Crises?
1.3 Will the Recovery Be Jobless?
1.4 Risks from Real Estate Markets
Chart Data 1.5 From Deficit to Surplus: Recent Shifts in Global Current Accounts
1.6 What Do Options Markets Tell Us about Commodity Price Prospects?
Chart Data 1.7 What Explains the Rise in Food Price Volatility?
4.1 A Historical Perspective on International Financial Crises
1.1 Overview of the World Economic Outlook Projections
1.2 Commodity Price Developments, 2008-09
1.3 Commodity Consumption and Market Share
1.4 Global Oil Demand and Production by Region
2.1 Advanced Economies: Real GDP, Consumer Prices, and Unemployment
2.2 Selected Asian Economies: Real GDP, Consumer Prices, and Current Account Balance
2.3 Advanced Economies: Current Account Positions
2.4 Selected Emerging European Economies: Real GDP, Consumer Prices, and Current Account Balance
2.5 Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance
2.6 Selected Western Hemisphere Economies: Real GDP, Consumer Prices, and Current Account Balance
2.7 Selected Middle Eastern Economies: Real GDP, Consumer Prices, and Current Account Balance
2.8 Selected African Economies: Real GDP, Consumer Prices, and Current Account Balance
3.1 House Price and Stock Price Busts from 1970 to 2008
3.2 Classification of Observations Based on Variable Thresholds
3.3 Parameters and Performance of Policy Regimes in Reaction to Financial Shocks
3.4 Parameters and Performance of Policy Regimes in Reaction to Productivity Shocks
3.5 Percentiles Used as Thresholds for Alarms
3.6 Marginal Probabilities Based on Probit Regressions
4.1 Output Losses versus Initial Conditions
4.2 Output Losses versus Postcrisis Conditions and Policies
4.3 Robustness: Output Losses versus Initial Conditions, Crisis Severity Omitted
4.4 Robustness: Output Losses versus Postcrisis Conditions, Crisis Severity Omitted
Chart Data 1.1 Current and Forward-Looking Indicators
Chart Data 1.2 Global Indicators
Chart Data 1.3 Developments in Mature Credit Markets
Chart Data 1.4 Emerging Market Conditions
Chart Data 1.5 External Developments
Chart Data 1.6 Measures of Monetary Policy and Liquidity in Selected Advanced Economies
Chart Data 1.7 General Government Fiscal balances and Public Debt
Chart Data 1.8 Public Support to Ease Financial Stress
Chart Data 1.9 Global Outlook
Chart Data 1.10 Global Inflation
Chart Data 1.11 Potential Growth and Unemployment Rates
Chart Data 1.12 GDP Growth
Chart Data 1.13 Global Imbalances
Chart Data 1.14 Risks to the Global Outlook
Chart Data 1.15 Global Scenarios
Chart Data 1.16 Commodity and Petroleum Prices
Chart Data 1.17 Commodity Prices in Global Recessions
Chart Data 1.18 World Energy Market Developments
Chart Data 1.19 Developments in Metal Markets
Chart Data 1.20 Recent Developments in Markets for Major Food Crops
Chart Data 2.1 United States: Signs of Stabilization
Chart Data 2.2 Advanced and Emerging Asia: Can the Recovery Be Sustained?
Chart Data 2.3 Europe: A Slow Rebound
Chart Data 2.4 Europe: Challenges Ahead
Chart Data 2.5 Commonwealth of Independent States (CIS): An Arduous Road to Recovery
Chart Data 2.6 Australia, Canada, and New Zealand: Turning the Page
Chart Data 2.7 Latin America: Recovery Is within Reach
Chart Data 2.8 Middle East: Resuming Growth
Chart Data 2.9 Africa: Resilient Economies
Chart Data 3.1 Asset Price Busts
Chart Data 3.2 Selected Macroeconomic Variables before and during House Price Busts
Chart Data 3.3 Selected Macroeconomic Variables before and during Stock Price Busts
Chart Data 3.4 Selected Macroeconomic Variables before and during High-Cost and Other House Price Busts, 1985-2008
Chart Data 3.5 The Probability of an Asset Price Bust
Chart Data 3.6 The Failure of the Indicators to Predict an Asset Price Bust
Chart Data 3.7 Recent Developments in House and Stock Prices
Chart Data 3.8 Warning Signs for Recent House Price Busts
Chart Data 3.9 Macroeconomic Patterns Underlying Recent House Price Booms
Chart Data 3.10 Recent House Price Booms and Household Balance Sheets
Chart Data 3.11 Monetary Policy before House Price Busts
Chart Data 3.12 Inflation and Output for Advanced Economies in Recent Years
Chart Data 3.13 House Prices and Monetary Conditions
Chart Data 3.14 Stock Prices and Monetary Conditions
Chart Data 3.15 Effects of a Financial Shock
Chart Data 3.16 Effects of a Productivity Shock
Chart Data 3.17 Optimal Weight on Nominal Credit in the Macroprudential Rule
Chart Data 4.1 Medium-Term Output per Capita after Financial Crises: Case Studies
Chart Data 4.2 Distribution of Crises across Time and Economy Type
Chart Data 4.3 Methodology Example (Korea 1997)
Chart Data 4.4 Output Evolution after Banking and Currency Crises
Chart Data 4.5 Medium-Term Growth after Banking Crises
Chart Data 4.6 Output Decomposition
Chart Data 4.7 Demand-Side Decomposition
Chart Data 4.8 Output Evolution versus Precrisis Investment
Chart Data 4.9 Output Evolution versus Precrisis Imbalances
Chart Data 4.10 Output Evolution versus Financial Development and Income
Chart Data 4.11 Output, Twin Crises, and Financial Openness
Chart Data 4.12 Employment Losses and Employment Protection Legislation
Chart Data 4.13 Output Losses and Macroeconomic Stimulus
Chart Data 4.14 Postcrisis Associations of Key Variables with Output Losses
Chart Data 4.15 Output Evolution after Banking Crises: Alternative Measures of Precrisis Trend