World Economic Outlook Slowing Growth, Rising Risks

World Economic and Financial Surveys World Economic Outlook Slowing Growth, Rising Risks 11 I N T E R N A T I O N A L M O N E T A R Y F U N D Wo r l d E c o n o m i c a n d F i n a n c i a l S u r v e y s WorldEconomic outlook September 2011 Slowing Growth, Rising Risks International Monetary Fund ©2011 International Monetary Fund Cover and Design: Luisa Menjivar and Jorge Salazar Composition: Maryland Composition Cataloging-in-Publication Data World economic outlook (International Monetary Fund) World economic outlook : a survey by the staff of the International Monetary Fund. — Washington, DC : International Monetary Fund, 1980– v. ; 28 cm. — (1981–1984: Occasional paper / International Monetary Fund, 0251-6365). — (1986– : World economic and financial surveys, 0256-6877) Semiannual. Some issues also have thematic titles. Has occasional updates, 1984– 1. Economic development — Periodicals. 2. Economic forecasting — Periodicals. 3. Economic policy — Periodicals. 4. International economic relations — Periodicals. I. International Monetary Fund. II. Series: Occasional paper (International Monetary Fund). III. Series: World economic and financial surveys. HC10.80 ISBN 978-1-61635-119-9 Please send orders to: International Monetary Fund, Publication Services P.O. Box 92780, Washington, D.C. 20090, U.S.A. Tel.: (202) 623-7430 Fax: (202) 623-7201 E-mail: publications@imf.org www.imfbookstore.org ConTEnTS Assumptions and Conventions ix Further Information and Data x Preface xi Foreword xiii Executive Summary xv Chapter 1. Global Prospects and Policies 1 Slowing Global Activity 1 Renewed Financial Instability 1 More Uneven Expansion 3 Economic Slack alongside Signs of Overheating 9 Risks Are Clearly to the Downside 11 Policy Challenges 19 National Perspectives on Policy Challenges 19 Multilateral Perspectives on Policy Challenges 27 Appendix 1.1. Commodity Market Developments and Prospects 32 References 66 Chapter 2. Country and Regional Perspectives 71 The United States: Weakening Again amid Daunting Debt Challenges 72 Europe: Enduring Economic and Financial Turbulence 76 Commonwealth of Independent States: Moderate Growth Performance 80 Asia: Securing a More Balanced Expansion 84 Latin America and the Caribbean: Moving toward More Sustainable Growth 88 Sub-Saharan Africa: Sustaining the Expansion 92 Middle East and North Africa: Growth Stalling amid Uncertainty 96 References 99 Chapter 3. Target What You Can Hit: Commodity Price Swings and Monetary Policy 101 Commodity Price Swings and Inflation 104 Monetary Policy and Food Price Shocks: A Simulation-Based Perspective 110 Policy Implications for Responding to Commodity Price Shocks 118 Appendix 3.1. Economies in the Data Set 122 Appendix 3.2. Technical Appendix 122 References 132 International Monetary Fund | September 2011 iii worldeconomicoutlook:Slowing growth, riSing riSkS Chapter 4. Separated at Birth? The Twin Budget and Trade Balances 135 Estimating the Strength of the Twin Deficits Link 137 Insights from Model-Based Simulations 145 Summary and Implications for the Outlook 151 Appendix 4.1 Data Construction and Sources 152 Appendix 4.2 Statistical Methodology, Robustness Checks, and Selected Additional Results on Export and Import Responses 153 Appendix 4.3 Global Integrated Monetary and Fiscal Model (GIMF) 156 References 159 Annex: IMF Executive Board Discussion of the outlook, August 2011 161 Statistical Appendix 163 Assumptions 163 What’s New 164 Data and Conventions 164 Classification of Countries 165 General Features and Composition of Groups in the World Economic Outlook Classification 165 Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2010 167 Table B. Advanced Economies by Subgroup 168 Table C. European Union 168 Table D. Emerging and Developing Economies by Region and Main Source of Export Earnings 169 Table E. Emerging and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries 170 Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies 172 List of Tables 177 Output (Tables A1–A4) 178 Inflation (Tables A5–A7) 186 Financial Policies (Table A8) 192 Foreign Trade (Table A9) 193 Current Account Transactions (Tables A10–A12) 195 Balance of Payments and External Financing (Tables A13–A15) 202 Flow of Funds (Table A16) 206 Medium-Term Baseline Scenario (Table A17) 210 World Economic Outlook,Selected Topics 211 Boxes Box 1.1. Slow Recovery to Nowhere? A Sectoral View of Labor Markets in Advanced Economies 41 Box 1.2. Credit Boom-Bust Cycles: Their Triggers and Policy Implications 47 Box 1.3. Are Equity Price Drops Harbingers of Recession? 51 Box 1.4. Financial Investment, Speculation, and Commodity Prices 56 Box 1.5. External Liabilities and Crisis Tipping Points 61 Box 3.1. Inflation in Sub-Saharan Africa during the 2008 Commodity Price Surge 125 Box 3.2. Food Price Swings and Monetary Policy in Open Economies 130 Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies 172 iv International Monetary Fund | September 2011 ... - tailieumienphi.vn