{
  "title": "IMF World Economic Outlook (WEO) Update, January 2017: A Shifting Global Economic Landscape",
  "publication": "World Economic Outlook, January 2017",
  "sourceUrl": "https://www.imf.org/en/publications/weo/issues/2016/12/27/a-shifting-global-economic-landscape",
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  "summary": "After a lackluster outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies.",
  "sections": [
    {
      "heading": "Summary of projections and headline figures",
      "content": "- Global output growth for 2016 is estimated at 3.1 percent.\n- Global growth is projected at 3.4 percent for 2017 and 3.6 percent for 2018 (unchanged from the October 2016 WEO).\n- Emerging market and developing economies (EMDEs) growth: 4.1 percent in 2016; projected 4.5 percent in 2017 and 4.8 percent in 2018.\n- Advanced economies projected to grow by 1.9 percent in 2017 and 2.0 percent in 2018 (0.1 and 0.2 percentage points higher than the October forecast).\n- United States projection assumes fiscal stimulus producing growth of 2.3 percent in 2017 and 2.5 percent in 2018, a cumulative increase in GDP of ½ percentage point relative to the October forecast.\n- China growth for 2017 revised to 6.5 percent (0.3 percentage point above the October forecast).\n- India growth forecasts trimmed: current (2016–17) fiscal year trimmed by one percentage point and next fiscal year by 0.4 percentage point.\n- Oil prices: average price in U.S. dollars a barrel was $42.7 in 2016; assumed price based on futures markets (as of December 6, 2016) is $51.2 in 2017 and $53.1 in 2018.\n- U.S. dollar: appreciated in real effective terms by over 6 percent since August.\n- U.S. 10-year Treasury nominal yields: increased by close to one percentage point since August and 60 basis points since the U.S. election (as of January 3)."
    },
    {
      "heading": "Developments in H2 2016 and near-term drivers",
      "content": "- Advanced economies exhibited a stronger-than-expected pickup, driven by reduced inventory drag and manufacturing recovery; the United States rebounded strongly and is approaching full employment.\n- Divergent EMDE performance: China stronger than expected (policy stimulus); weaker-than-expected activity in Argentina, Brazil, Turkey; Russia slightly better reflecting firmer oil prices.\n- Commodity prices: oil and base metals strengthened following producer agreement and demand/investment conditions.\n- Inflation: headline inflation recovered in advanced economies with commodity bottoming; core inflation generally remained below targets. China’s producer price inflation turned positive.\n- Financial conditions: long-term nominal and real interest rates rose substantially since August, particularly in the United Kingdom and United States. Euro area long-term yields rose more moderately (Germany ~35 basis points, Italy ~70 basis points).\n- Exchange rates and capital flows: appreciation of some commodity exporters’ currencies; depreciation in several emerging market currencies (notably Turkish lira, Mexican peso); preliminary sharp nonresident portfolio outflows from emerging markets after the U.S. election."
    },
    {
      "heading": "Forecast revisions by region and notable country changes",
      "content": "- Aggregate 2016–18 projections unchanged from October WEO, but internal composition adjusted:\n  - Advanced economies: upward revisions for the United States, Germany, Japan, Spain, and the United Kingdom; downward revisions for Italy and Korea.\n  - EMDEs: near-term prospects marginally weaker overall; China revised up for 2017 to 6.5 percent; Nigeria revised up reflecting higher oil production.\n  - Downward revisions for 2017: India (current and next fiscal year), Indonesia, Thailand, Argentina, Brazil, Mexico, Saudi Arabia, Venezuela deterioration noted.\n- EMDE growth estimated at 4.1 percent in 2016; projected 4.5 percent in 2017 (around 0.1 percentage point weaker than October) and 4.8 percent in 2018."
    },
    {
      "heading": "Balance of risks and scenarios",
      "content": "- Overall risk assessment: two-sided but skewed to the downside, especially over the medium term.\n- Upside scenario:\n  - Policy stimulus in the United States and/or China larger than incorporated could accelerate global activity and lift trading partners’ growth (unless offset by protectionism).\n  - Higher investment if confidence in global demand recovery strengthens.\n- Downside scenarios and notable risks:\n  - Shift toward inward-looking policies and protectionism, harming productivity, incomes, and market sentiment.\n  - Sharper tightening in global financial conditions interacting with balance sheet weaknesses in parts of the euro area and some EMDEs.\n  - High corporate debt, weak bank balance sheets, thin policy buffers in some EMDEs increasing vulnerability to capital flow reversals and sharp depreciations.\n  - Geopolitical tensions, civil conflict, refugee crises, terrorism, extended droughts, and epidemics (e.g., Zika) could deepen hardship and depress global confidence.\n  - A more severe slowdown in China given reliance on policy stimulus, rapid credit expansion, and persistent corporate debt problems."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Advanced economies with negative output gaps and muted wage pressures:\n  - Monetary policy should remain accommodative, using unconventional tools as needed.\n  - Fiscal support is essential where space exists, calibrated to protect the vulnerable and lift medium-term growth prospects; if fiscal adjustment is necessary, pace and composition should minimize output drag.\n- Advanced economies without substantially negative output gaps:\n  - Fiscal support should target safety nets and investments that raise longer-term potential (high-quality infrastructure, supply-friendly equitable tax reform).\n  - Well-anchored inflation expectations should permit gradual monetary normalization.\n- Broad structural agenda:\n  - Complement accommodative macro policies with reforms to boost labor force participation, invest in skills, improve labor-market matching, liberalize entry into closed professions, and promote innovation and R&D to counteract waning potential growth.\n- Emerging market and developing economies:\n  - Enhance financial resilience; adopt stronger risk management; contain balance sheet mismatches where large nonfinancial debt, unhedged foreign liabilities, or heavy reliance on short-term funding are present.\n  - Low-income countries: restore fiscal buffers while prioritizing efficient spending on capital and social needs, strengthen debt management, improve domestic revenue mobilization, and implement structural reforms including education.\n  - Commodity-dependent countries: allow exchange rate adjustment where feasible, tighten monetary policy to contain inflation rises, and pursue growth-friendly fiscal consolidation; diversify export bases over the longer term.\n- Multilateral priorities:\n  - Strengthen global safety nets to protect economies with robust fundamentals but vulnerability to cross-border spillovers.\n  - Coordinate to share benefits of integration broadly: targeted assistance for those adversely affected by trade opening; crack down on tax evasion and avoidance; continue financial-sector resilience efforts (recapitalization, balance-sheet cleanup, banking resolution frameworks, address nonbank intermediary risks).\n  - Multilateral cooperation to meet 2015 Sustainable Development Goals, mitigate climate change, and prevent the spread of global epidemics.\n\nSource: IMF World Economic Outlook Update, January 2017: A Shifting Global Economic Landscape\n\n---\n\n Content in this bundle\n\n- World Economic Outlook Update, January 2017: A Shifting Global Economic Landscape, January 16, 2017\n  - World Economic Outlook Update, January 2017: A Shifting Global Economic Landscape, January 16, 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - World Economic Outlook Update, January 2017: A Shifting Global Economic Landscape, January 16, 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n- مستجدات آفاق الاقتصاد العالمي: الاقتصاد العالمي في مشهد متحول\n  - مستجدات آفاق الاقتصاد العالمي: الاقتصاد العالمي في مشهد متحول (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - مستجدات آفاق الاقتصاد العالمي: الاقتصاد العالمي في مشهد متحول (PDF){rel=\"external\" type=\"application/pdf\"}\n- 《世界经济展望》最新预测，2017年1月：转变中的全球经济形势；2017年1月16日\n  - 《世界经济展望》最新预测，2017年1月：转变中的全球经济形势；2017年1月16日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 《世界经济展望》最新预测，2017年1月：转变中的全球经济形势；2017年1月16日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 0117f\n  - 0117f (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 0117f (PDF){rel=\"external\" type=\"application/pdf\"}\n- 世界経済見通し改訂見通し（2017年1月) - 移り行く世界経済の展望\n  - 世界経済見通し改訂見通し（2017年1月) - 移り行く世界経済の展望 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 世界経済見通し改訂見通し（2017年1月) - 移り行く世界経済の展望 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 0117r\n  - 0117r (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 0117r (PDF){rel=\"external\" type=\"application/pdf\"}\n- 0117s\n  - 0117s (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 0117s (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Blog on the Update by IMF Chief Economist Maurice Obstfeld\n- Transcript of the Press Conference on the World Economic Outlook Update\n- World Economic Outlook Reports\n- World Economic Outlook Databases\n- https://www.imf.org/en/about/infographics/world-economic-outlook-update-january-2017-infographic\n- Buy a print subscription\n- ORDERING INFORMATION\n- DISCLAIMER\n- Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.\n- Modify your profile\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/weo/issues/2016/12/27/a-shifting-global-economic-landscape"
    }
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    "[Markdown version](/en/publications/weo/issues/2016/12/27/a-shifting-global-economic-landscape/index.md)",
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    "Published: January 16, 2017",
    "Global output growth for 2016 is estimated at 3.1 percent.",
    "Global growth is projected at 3.4 percent for 2017 and 3.6 percent for 2018 (unchanged from the October 2016 WEO).",
    "Emerging market and developing economies (EMDEs) growth: 4.1 percent in 2016; projected 4.5 percent in 2017 and 4.8 percent in 2018.",
    "Advanced economies projected to grow by 1.9 percent in 2017 and 2.0 percent in 2018 (0.1 and 0.2 percentage points higher than the October forecast).",
    "United States projection assumes fiscal stimulus producing growth of 2.3 percent in 2017 and 2.5 percent in 2018, a cumulative increase in GDP of ½ percentage point relative to the October forecast.",
    "China growth for 2017 revised to 6.5 percent (0.3 percentage point above the October forecast).",
    "India growth forecasts trimmed: current (2016–17) fiscal year trimmed by one percentage point and next fiscal year by 0.4 percentage point.",
    "Oil prices: average price in U.S. dollars a barrel was $42.7 in 2016; assumed price based on futures markets (as of December 6, 2016) is $51.2 in 2017 and $53.1 in 2018.",
    "U.S. dollar: appreciated in real effective terms by over 6 percent since August.",
    "U.S. 10-year Treasury nominal yields: increased by close to one percentage point since August and 60 basis points since the U.S. election (as of January 3).",
    "Advanced economies exhibited a stronger-than-expected pickup, driven by reduced inventory drag and manufacturing recovery; the United States rebounded strongly and is approaching full employment.",
    "Divergent EMDE performance: China stronger than expected (policy stimulus); weaker-than-expected activity in Argentina, Brazil, Turkey; Russia slightly better reflecting firmer oil prices.",
    "Commodity prices: oil and base metals strengthened following producer agreement and demand/investment conditions.",
    "Inflation: headline inflation recovered in advanced economies with commodity bottoming; core inflation generally remained below targets. China’s producer price inflation turned positive.",
    "Financial conditions: long-term nominal and real interest rates rose substantially since August, particularly in the United Kingdom and United States. Euro area long-term yields rose more moderately (Germany ~35 basis points, Italy ~70 basis points).",
    "Exchange rates and capital flows: appreciation of some commodity exporters’ currencies; depreciation in several emerging market currencies (notably Turkish lira, Mexican peso); preliminary sharp nonresident portfolio outflows from emerging markets after the U.S. election.",
    "Aggregate 2016–18 projections unchanged from October WEO, but internal composition adjusted:",
    "EMDE growth estimated at 4.1 percent in 2016; projected 4.5 percent in 2017 (around 0.1 percentage point weaker than October) and 4.8 percent in 2018.",
    "Overall risk assessment: two-sided but skewed to the downside, especially over the medium term.",
    "Upside scenario:",
    "Downside scenarios and notable risks:",
    "Advanced economies with negative output gaps and muted wage pressures:",
    "Advanced economies without substantially negative output gaps:",
    "Broad structural agenda:",
    "Emerging market and developing economies:",
    "Multilateral priorities:",
    "**World Economic Outlook Update, January 2017: A Shifting Global Economic Landscape, January 16, 2017**",
    "**مستجدات آفاق الاقتصاد العالمي: الاقتصاد العالمي في مشهد متحول**",
    "**《世界经济展望》最新预测，2017年1月：转变中的全球经济形势；2017年1月16日**",
    "**0117f**",
    "**世界経済見通し改訂見通し（2017年1月) - 移り行く世界経済の展望**",
    "**0117r**",
    "**0117s**",
    "[Blog on the Update by IMF Chief Economist Maurice Obstfeld](https://blog-imfdirect.imf.org/2017/01/16/a-shifting-global-economic-landscape-update-to-the-world-economic-outlook/)",
    "[Transcript of the Press Conference on the World Economic Outlook Update](http://www.imf.org/en/News/Articles/2017/01/16/tr01162017-Press-Briefing-On-Update-Of-The-World-Economic-Outlook)",
    "[World Economic Outlook Reports](http://www.imf.org/external/ns/cs.aspx?id=29)",
    "[World Economic Outlook Databases](http://www.imf.org/external/ns/cs.aspx?id=28)",
    "[https://www.imf.org/en/about/infographics/world-economic-outlook-update-january-2017-infographic](https://www.imf.org/en/about/infographics/world-economic-outlook-update-january-2017-infographic)",
    "[Buy a print subscription](https://www.bookstore.imf.org/)",
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