Russian
Global growth is in low gear, and the drivers of activity are
changing. These dynamics raise new policy challenges. Advanced
economies are growing again but must continue financial sector
repair, pursue fiscal consolidation, and spur job growth. Emerging
market economies face the dual challenges of slowing growth and
tighter global financial conditions. This issue of the World
Economic Outlook examines the potential spillovers from these
transitions and the appropriate policy responses. Chapter 3 explores
how output comovements are influenced by policy and financial shocks,
growth surprises, and other linkages. Chapter 4 assesses why certain
emerging market economies were able to avoid the classical
boom-and-bust cycle in the face of volatile capital flows during the
global financial crisis.
Contents
Chapter 1: Global
Prospects and Policies
Growth Dynamics Further Diverge |
External Sector Developments |
Policy Challenges |
Rebalancing Global Demand |
Special Feature: Commodity Market
Review |
Boxes |
|
|
1.SF.1. |
Booms and the Current Account:
Cross-Country Experience |
|
|
1.SF.2. |
Oil Price Drivers and the Narrowing
WTI-Brent Spread |
|
|
1.1 |
Taper Talks: What to Expect when
the United States Is Tightening |
|
|
1.2 |
What Explains the Slowdowns in the
BRICS? |
|
|
1.3 |
External Rebalancing in the Euro
Area |
|
|
1.4 |
Abenomics: Risks after Early
Success? |
Tables |
1.1 |
Overview of the World
Economic Outlook Projections |
1.SF.1 |
First-Round Trade
Balance Impact from Changes in Commodity Prices |
1.SF.2 |
Temporary Oil Price
Shock Impact on GDF and Current Accounts: Scenarios
1, 2, and 3 |
1.1.1 |
Real GDP Growth |
1.2.1 |
The Slowdown of Real
and Potential Growth in the BRICS |
1.2.2 |
Five-Year-Ahead
Forecast Growth and Average Growth from 1998 to 2013
in the BRICS |
Figures |
Chart |
Data |
1.1 |
Global Growth |
Chart |
Data |
1.2 |
Global Activity
Indicators |
Chart |
Data |
1.3 |
GDP Growth Forecasts |
Chart |
Data |
1.4 |
Monetary Conditions
in Advanced Economies |
Chart |
Data |
1.5 |
Fiscal Policies |
Chart |
Data |
1.6 |
Global Inflation |
Chart |
|
1.7 |
Overheating
Indicators for the G20 Economies |
Chart |
Data |
1.8 |
Financial Market
Conditions |
Chart |
Data |
1.9 |
Capital Flows |
Chart |
Data |
1.10 |
Exchange Rates and
Reserves |
Chart |
Data |
1.11 |
Financial Conditions
in Emerging Markets since May 2013 |
Chart |
Data |
1.12 |
Capacity and Credit
in Emerging Market Economies |
Chart |
Data |
1.13 |
Real GDP Projections
Past and Current |
Chart |
Data |
1.14 |
Global Trade and
Imbalances |
Chart |
Data |
1.15 |
Risks to the Global
Outlook |
Chart |
Data |
1.16 |
Recession and
Deflation Risks |
Chart |
Data |
1.17 |
Plausible Downside
Scenario |
Chart |
Data |
1.18 |
Rebalancing Scenario |
Chart |
Data |
1.SF.1 |
IMF Commodity Price
Indices |
Chart |
Data |
1.SF.2 |
Commodity Prices and
Emerging Markets Economic Activity |
Chart |
Data |
1.SF.3 |
Trade Balance
Impacts of Energy and Metal Price Declines |
Chart |
Data |
1.SF.4 |
Illustrative Impact
of Chinese Demand Slowdown on Commodity Exporters |
Chart |
Data |
1.SF.5 |
Balance of Risks |
Chart |
Data |
1.SF.6 |
U.S. Oil and Gas
Production Projections |
Chart |
Data |
1.SF.7 |
Medium-Term Impact
of U.S. Energy Boom |
Chart |
Data |
1.SF.8 |
Natural Gas and Oil
Prices in the United States and Germany |
Chart |
Data |
1.SF.1.1 |
Giant Oil and Gas
Discoveries and the Current Account |
Chart |
Data |
1.SF.2.1 |
WTI–Brent Price
Differentials |
Chart |
Data |
1.SF.2.2 |
Brent SVAR
Historical Decomposition |
Chart |
Data |
1.SF.2.3 |
WTI–Brent
Differential: Historical Decomposition |
Chart |
Data |
1.1.1 |
U.S. Growth and
Financial Indicators |
Chart |
Data |
1.1.2 |
Global Economic and
Financial Conditions during U.S. Monetary Policy
Tightening |
Chart |
Data |
1.1.3 |
Gross Capital
Inflows to Emerging Markets |
Chart |
Data |
1.2.1 |
Real GDP Growth |
Chart |
Data |
1.2.2 |
Composition of
2011–13 Growth Changes |
Chart |
Data |
1.2.3 |
World Export Growth,
the U.S. Real Interest Rate, and Commodity Prices |
Chart |
Data |
1.3.1 |
Developments in
External Balance |
Chart |
Data |
1.3.2 |
Cumulative Unit
Labor Cost Adjustment |
Chart |
Data |
1.3.3 |
Export Performance
and External Adjustment |
Chart |
Data |
1.4.1 |
Inflation
Expectations |
Chart |
Data |
1.4.2 |
Effect of Abenomics
under Various Scenarios |
Chapter 2: Country
and Regional Perspectives
The United States and Canada: A
Modest Recovery |
Europe: Supporting the Fledgling
Recovery |
Asia: A Lower Growth Trajectory |
Latin America and the Caribbean:
Growth Is Subdued |
Commonwealth of Independent States:
Slower Growth amid Weak External and Internal Demand |
Middle East, North Africa,
Afghanistan, and Pakistan: Growth Hinges on
Improvements in Oil Production and Confidence |
Sub-Saharan Africa: Continued
Dynamism |
References |
Tables |
2.1 |
Selected Advanced
Economies: Real GDP, Consumer Prices, Current
Account Balance, and Unemployment |
2.2 |
Selected European
Economies: Real GDP, Consumer Prices, Current
Account Balance, and Unemployment |
2.3 |
Selected Asian
Economies: Real GDP, Consumer Prices, Current
Account Balance, and Unemployment |
2.4 |
Selected Western
Hemisphere Economies: Real GDP, Consumer Prices,
Current Account Balance, and Unemployment |
2.5 |
Commonwealth of
Independent States: Real GDP, Consumer Prices,
Current Account Balance, and Unemployment |
2.6 |
Selected Middle East
and North African Economies: Real GDP, Consumer
Prices, Current Account Balance, and Unemployment |
2.7 |
Selected Sub-Saharan
African Economies: Real GDP, Consumer Prices,
Current Account Balance, and Unemployment |
Figures |
Chart |
Data |
2.1 |
The Effects of a
Plausible Downside Scenario |
Chart |
Data |
2.2 |
United States and
Canada: 2013 GDP Growth Forecasts |
Chart |
Data |
2.3 |
United States and
Canada: A Modest Recovery |
Chart |
Data |
2.4 |
Europe: 2013 GDP
Growth Forecasts |
Chart |
Data |
2.5 |
Advanced Europe:
Abating Tail Risks, but Prolonged Stagnation
|
Chart |
Data |
2.6 |
Emerging Europe:
Growth Continues despite Increased Financial
Volatility |
Chart |
Data |
2.7 |
Asia: 2013 GDP
Growth Forecasts |
Chart |
Data |
2.8 |
Asia: A Lower Growth
Trajectory |
Chart |
Data |
2.9 |
Latin America and
the Caribbean: 2013 GDP Growth Forecasts |
Chart |
Data |
2.10 |
Latin America:
Growth Is Subdued |
Chart |
Data |
2.11 |
Commonwealth of
Independent States: 2013 GDP Growth Forecasts |
Chart |
Data |
2.12 |
Commonwealth of
Independent States: Slower Growth amid Weak External
and Internal Demand |
Chart |
Data |
2.13 |
Middle East, North
Africa, Afghanistan, and Pakistan: 2013 GDP Growth
Forecasts |
Chart |
Data |
2.14 |
Middle East, North
Africa, Afghanistan, and Pakistan: Growth Hinges on
Improvements in Oil Production and Confidence |
Chart |
Data |
2.15 |
Sub-Saharan Africa:
2013 GDP Growth Forecasts |
Chart |
Data |
2.16 |
Sub-Saharan Africa:
Continued Dynamism |
Chapter 3:
Dancing Together? Spillovers, Common Shocks, and the Role of
Financial and Trade Linkages
This chapter explores how output comovements have
evolved in recent years and how they are influenced by
various shocks and linkages. It assesses the possible
output spillovers from those shocks that most concern
policymakers, including policy shocks, such as
unexpected monetary or fiscal tightening; financial
shocks, such as a systemic banking crisis or renewed
financial turmoil; and growth surprises (which could be
driven by either real or financial shocks) in advanced
economies or in large emerging markets.
Output Comovements: Conceptual
Framework and Stylized Facts |
The Role of Common Shocks and
Financial and Trade Linkages |
Spillovers of Country-Specific
Shocks to Other Countries and the Role of Financial
and Trade Linkages |
Summary and Implications for the
Outlook |
Conclusions |
Appendix |
3.1 |
Data Definitions,
Sources, and Country Groupings |
3.2 |
Multiperiod Comovement
Regressions |
3.3 |
Growth Regressions |
Boxes |
3.1 |
Output Synchronicity in
the Middle East, North Africa, Afghanistan, and
Pakistan and in the Caucasus and Central Asia |
3.2 |
Spillovers from Changes
in U.S. Monetary Policy |
References |
Figures |
Chart |
Data |
3.1 |
The Evolution of
Output Comovements, 2004–12 |
Chart |
Data |
3.2 |
Output Comovements:
1978–2012 |
Chart |
Data |
3.3 |
Output Comovements:
Back to Precrisis Levels? |
Chart |
Data |
3.4 |
What’s Behind
“Common Shocks”? |
Chart |
Data |
3.5 |
Growth Surprises in
the United States, Euro Area, and China and their
Impact on Growth in Other Countries |
Chart |
Data |
3.6 |
Peak Impact of
Growth Disappointments on Other Regions |
Chart |
Data |
3.7 |
Cross-Border Impact
of Financial Shocks |
Chart |
Data |
3.8 |
Impact of U.S. and
Euro Area Financial Shocks |
Chart |
Data |
3.9 |
Cross-Border Impact
of Policy Shocks |
Chart |
Data |
3.10 |
Peak Impact of
Fiscal Policy Shocks on Other Regions |
Chart |
Data |
3.11 |
Cross-Border Impact
of Monetary Policy Shocks on Industrial Production |
Chart |
Data |
3.12 |
Peak Impact of
Monetary Policy Shocks on Other Regions |
Chart |
Data |
3.13 |
Impact of U.S.
Credit Supply Shocks |
Chart |
Data |
3.14 |
Comparison of
Various Output Comovement Measures |
Chart |
Data |
3.15.a |
Growth Surprise
Shocks |
Chart |
Data |
3.15.b |
Financial Shocks |
Chart |
Data |
3.15.c |
Policy Shocks |
Chart |
Data |
3.16.a |
Cross-Border Impact
of Growth Surprises in the United States, Euro Area,
and China on Growth in Other Countries |
Chart |
Data |
3.16.b |
b Cross-Border
Impact of Growth Surprises in the United States and
Euro Area on Growth in Other Countries |
Chart |
Data |
3.16.c |
Cross-Border Impact
of Fiscal Policy Shocks on Growth in Other Countries |
Chart |
Data |
3.16.d |
Cross-Border Impact
of Monetary Policy Shocks on Growth in Other
Countries |
Chart |
Data |
3.17 |
Cross-Border Output
Impact of Tax- versus Spending-Based Shocks
|
Chart |
Data |
3.1.1 |
Output Comovements
between MCD Groups and External Partners |
Chart |
Data |
3.1.2 |
Output Comovements
in Middle East and Central Asia Country Groups |
Chart |
Data |
3.2.1 |
Impact of Monetary
Policy Shocks |
Chart |
Data |
3.1.1 |
Monthly Percent
Increase on Short-Term Rates |
Chart |
Data |
3.2.3 |
Response to Federal
Funds Rate Shocks |
Chart |
Data |
3.2.4 |
Exchange Rate
Response to Federal Funds Rate Surprises |
Chart |
Data |
3.2.5 |
Monetary Policy
Autonomy |
Chapter 4: The
Yin and Yang of Capital Flow Management: Balancing Capital
Inflows with Capital Outflows
Historically, surges in capital inflows to emerging
market economies tended to lead to domestic booms and
current account deficits and, when the flows reversed,
painful adjustments and sometimes financial crisis. The
global financial crisis, however, marked a change from
the past. While some countries experienced the classical
boom-and-bust cycle in response to volatile
international capital flows, many did not. Instead,
domestic residents stepped in to replace foreign capital
by drawing down their own foreign assets. Chapter 4
examines whether it is possible to use policy to
encourage such behavior.
Financial Adjustment and Resilience |
How Are the More Resilient Economies
Different? |
Case Studies |
Overall Analysis |
Conclusions |
Box |
4.1 |
Simulating
Vulnerability to International Capital Market
Conditions |
Figures |
Chart |
Data |
4.1 |
Gross Capital
Inflows |
Chart |
Data |
4.2 |
Account, GDP,
Consumption, and Unemployment |
Chart |
Data |
4.3 |
Policies and
Institutions |
Chart |
Data |
4.4 |
External Financial
Integration |
Chart |
Data |
4.5 |
Economic Structure
and Reserves |
Chart |
Data |
4.6 |
Chile |
Chart |
Data |
4.7 |
Malaysia |
Chart |
Data |
4.8 |
The Czech Republic |
Chart |
Data |
4.1.1 |
Responses to Changes
in International Capital Market Conditions |
Source
|