iii
Assumptions and Conventions ix
Preface xi
Foreword xiii
Executive Summary xv
Chapter 1. Global Prospects and Policies 1
Stronger Activity, but Setbacks to Financial Stability 1
Questions about the Pace of Recovery 8
More Proactive Policies Are Needed 35
Appendix 1.1. Commodity Market Developments and Prospects 45
Appendix 1.2. Indicators for Tracking Growth 55
References 59
Chapter 2. Country and Regional Perspectives 61
Asia Is Advancing with Resilience 62
The U.S. Recovery Is Moderating in the Face of Debt and Continued Uncertainty 68
Europe Is Facing a Gradual and Uneven Recovery 72
Latin America Is Sustaining Its Growth Momentum 77
The CIS Region Is Experiencing a Modest Recovery 81
The Middle East and North Africa Region Is Recovering Strongly 84
Africa’s Growth Is Accelerating 88
References 91
Chapter 3. Will It Hurt? Macroeconomic Effects of Fiscal Consolidation 93
Looking At History: What Is the Short-Term Impact of Fiscal Consolidation? 95
Additional Insights from Model Simulations 108
Lessons for Countries Considering Fiscal Consolidation 113
Appendix 3.1. Data Sources 113
Appendix 3.2. Estimation Approach 115
Appendix 3.3. Identifying Periods of Fiscal Consolidation: The Standard Approach
versus the Action-Based Approach 117
References 122
Contents
contents
iv
Chapter 4. Do Financial Crises Have Lasting Effects on Trade? 125
Has Trade Recovered? 127
Trade Dynamics following Previous Crises 132
What Factors Are Associated with Postcrisis Import Dynamics? 139
Summary and Implications for the Outlook 144
Appendix 4.1. Data Sources 148
Appendix 4.2. Methodology and Robustness Tests 151
References 158
Annex: IMF Executive Board Discussion of the Outlook, September 2010 161
Statistical Appendix 163
Assumptions 163
What’s New 168
Data and Conventions 168
Classification of Countries 169
General Features and Composition of Groups in the World Economic Outlook Classification 169
Emerging and Developing Economies 171
List of Tables 175
Output (Tables A1–A4) 177
Inflation (Tables A5–A7) 185
Financial Policies (Table A8) 191
Foreign Trade (Table A9) 192
Current Account Transactions (Tables A10–A12) 194
Balance of Payments and External Financing (Tables A13–A15) 200
Flow of Funds (Table A16) 204
Medium-Term Baseline Scenario (Table A17) 208
World Economic Outlook, Selected Topics 209