World Economic Outlook, October 2007: Globalization and Inequality

World Economic Outlook, April 11, 2007

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The global economy grew strongly in the first half of 2007.
The 2008 baseline projection for global growth has been reduced by almost ½ percentage point relative to the July 2007 World Economic Outlook Update.
The revised baseline would still leave global growth at a solid 4¾ percent, supported by generally sound fundamentals and strong momentum in emerging market economies.
The 2007 forecast has been little affected.

Downside risks are emphasized, centered on concern that financial market strains could deepen and trigger a more pronounced global slowdown.
Additional risks include:
- potential inflation pressures,
- volatile oil markets,
- impact on emerging markets of strong foreign exchange inflows.
Longer-term concerns highlighted:
- population aging,
- increasing resistance to globalization,
- global warming.

Immediate policymaker focus: restore more normal financial market conditions and safeguard the expansion.
Implicit policy priorities driven by risks:
- contain and manage financial market turbulence,
- monitor and address inflationary pressures,
- manage capital inflows and exchange rate implications for emerging markets,
- consider structural and long-term policy responses to demographic change, resistance to globalization, and climate risks.

Subject: Balance of payments, Capital inflows, Emerging and frontier financial markets, Financial markets, Income distribution, Income inequality, Inflation, National accounts, Personal income, Prices
Keywords: advanced economy, Asia and Pacific, Box, Capital inflows, Caribbean, Central and Eastern Europe, economy, Emerging and frontier financial markets, emerging market, Europe, factor income, financial market, Global, Income distribution, Income inequality, income share, Inflation, market, Middle East, monetary policy rule, net debtor countries, Personal income, trade globalization, U.S. dollar, WEO, Western Europe