CHAPTER 1 GLOBAL PROSPECTS AND POLICIES advanced economy sovereign securities(in particular, Figure 1.6. Emerging Market Economies: Interest Rates and 10-year US Treasury notes, German bunds, UK gilts) have priced in a lower path for future policy rates and are generally 40-80 basis points below the peaks of Financial conditions in emerging market economies differentiation across economies based on country-specific fundamental early November 2018. Italian spreads over German bunds, about 250 basis points as of late March, have declined from their late-October/early-November peak Argentina(night scale)y but remain elevated. Riskier asset classes have generally25-1.Policy Rate benefited from improved sentiment at the start of 2019 Equity markets in the United States and Europe have regained footing after the sharp sell-off at the end of 2018, while high-yield corporate spreads-which had decompressed significantly in December--have nar- rowed since. but still remain wider than in October Financial conditions in emerging markets improved 05051 in early 2019 but remain somewhat tighter than in 17 October(Figure 1.6). Country-specific economic funda mentals and political factors continued to drive differ- 2. Ten-Year Govemment Bond Yields entiation across economies in the group. Central banks in many emerging market economies( Chile, Indonesia, rates since october because of concerns that inflation may rise following the increase in oil prices in 2018 and, for some countries, pass-through from previous cur 6 rency depreciation. In China, the central bank provided 2 16 liquidity support and reduced reserve requirements all banks as growth moderated. Long-term sovereign 10-3. Change in EMBI Spread yields and spreads over advanced economies are broadly back to October levels. In Mexico, concerns over policy September 2018 over April 2018 mber 2018 reversals under the new administration led to a notable widening of the sovereign spread during November and December, but it has since narrowed In Brazil, spreads have declined since October amid optimism about the ■ prospects of pension reform under the new government. Following ongoing adjustments to rein in financial imbalances in Argentina and Turkey, spreads for both CHN EGY IDN MAR MEX PHL ROU TUR ZAF have declined somewhat but remain elevated. In line 400-4. Current Account Balance and Change in EMBI Spreads with improving risk sentiment this year, emerging mar tet equity indexes have recovered some of the ground lost in late 2018 and are now broadly at or have sur- ROU ZAF MEX passed the levels of October in most cases(Figure 1.7) Exchange rates: With regard to major currencies, as 2 0 EGY of late March, the US dollar was back to its Septer 1963+18.73 ber 2018 level: the late-2018 appreciation reversed R2=0.46 following a shift in market expectations about the pace and extent of monetary policy tightening(Figure 1.8 Current account 2017(percent of GDP panel 1). The euro depreciated by about 3 percent over Statistics: Thomson Reuters this period, on weaker-than-expected macroeconomic and imf staff calculation data and concerns about Italy. The yen appreciated L P. Morgan Emerging Markets Bond Index. Data labels nization for Standardization(SO)country Co modestly, and the pound strengthened by about ket data are through March 22, 2019 3 percent on shifting expectations of the outcome International Monetary Fund April 2019
5 CHAPTER 1 Glob al Prospects and Policies International Monetary Fund | April 2019 advanced economy sovereign securities (in particular, 10-year US Treasury notes, German bunds, UK gilts) have priced in a lower path for future policy rates and are generally 40–80 basis points below the peaks of early November 2018. Italian spreads over German bunds, about 250 basis points as of late March, have declined from their late-October/early-November peaks, but remain elevated. Riskier asset classes have generally benefited from improved sentiment at the start of 2019. Equity markets in the United States and Europe have regained footing after the sharp sell-off at the end of 2018, while high-yield corporate spreads—which had decompressed significantly in December—have narrowed since, but still remain wider than in October. Financial conditions in emerging markets improved in early 2019 but remain somewhat tighter than in October (Figure 1.6). Country-specific economic fundamentals and political factors continued to drive differentiation across economies in the group. Central banks in many emerging market economies (Chile, Indonesia, Mexico, Philippines, South Africa) have lifted policy rates since October because of concerns that inflation may rise following the increase in oil prices in 2018 and, for some countries, pass-through from previous currency depreciation. In China, the central bank provided liquidity support and reduced reserve requirements for all banks as growth moderated. Long-term sovereign yields and spreads over advanced economies are broadly back to October levels. In Mexico, concerns over policy reversals under the new administration led to a notable widening of the sovereign spread during November and December, but it has since narrowed. In Brazil, spreads have declined since October amid optimism about the prospects of pension reform under the new government. Following ongoing adjustments to rein in financial imbalances in Argentina and Turkey, spreads for both have declined somewhat but remain elevated. In line with improving risk sentiment this year, emerging market equity indexes have recovered some of the ground lost in late 2018 and are now broadly at or have surpassed the levels of October in most cases (Figure 1.7). Exchange rates: With regard to major currencies, as of late March, the US dollar was back to its September 2018 level: the late-2018 appreciation reversed following a shift in market expectations about the pace and extent of monetary policy tightening (Figure 1.8, panel 1). The euro depreciated by about 3 percent over this period, on weaker-than-expected macroeconomic data and concerns about Italy. The yen appreciated modestly, and the pound strengthened by about 3 percent on shifting expectations of the outcome China Brazil Turkey Mexico Argentina (right scale) September 2018 over April 2018 Latest over September 2018 Figure 1.6. Emerging Market Economies: Interest Rates and Spreads 2015 16 17 18 Mar. 19 4. Current Account Balance and Change in EMBI Spreads1 –150 –100 –50 0 50 100 150 200 250 300 400 350 –100 –50 0 50 100 150 200 250 300 400 350 ARG Current account 2017 (percent of GDP) –12 –10 –8 –6 –4 –2 0 2 4 Change in EMBI spread (basis points, Apr. 16, 2018– Mar. 22, 2019) BRA CHL CHN COL EGY HUN IDN IND MAR MYS MEX PER PHL POL ROU RUS TUR TUN ZAF 2 6 10 14 18 22 2. Ten-Year Government Bond Yields1 (Percent) 3. Change in EMBI Spreads1 (Basis points) 2015 16 17 10 15 20 25 30 35 40 45 50 55 18 Feb. 19 1. Policy Rate (Percent) 0 5 10 15 20 25 Financial conditions in emerging market economies improved in early 2019, with differentiation across economies based on country-specific fundamentals. Sources: Haver Analytics; IMF, International Financial Statistics; Thomson Reuters Datastream; and IMF staff calculations. Note: EMBI = J.P. Morgan Emerging Markets Bond Index. Data labels use International Organization for Standardization (ISO) country codes. 1 Financial market data are through March 22, 2019. TUN MYS MAR PER CHL ROU COL ZAF PHL ARG HUN POL EGY TUR MEX BRA IDN RUS IND CHN y = –19.63 + 18.73 R2 = 0.46
WORLD ECONOMIC OUTLOOK: GROWTH SLOWDOWN, PRECARIOUS RECOVERY Figure 1.7. Emerging Market Economies: Equity Markets and Figure 1. 8. Real Effective Exchange Rate Changes, Credit September 2018-March 2019 (Percent) Emerging market equity indexes have recovered some of the ground lost in late 2018 a shift in market expectations about the pace and extent of US monetary olicy tightening, the late-2018 appreciation of the dollar reversed and Equity Markets market currencies generally strengthene ndex,2015=100) 1. 70 December 2018 over September 2018 xcluding c 00000 6-1. Advanced economies Russia South africa Turke 2015161718Fb.2015161718Feb Real Credit growth (Year-over-year percent change) USA EA JPN GBR SWE CHE KOR TWN SGP CAN NOR AUS NZL BRA一CHN 25-2. Emerging Market Economies -IND- MEX MYS RUS 20151617 Jan. 2015 16 17 Jan. -15 ZAF IND MYS THA POL TUR BRA COL PER Credit-to-GDP RatioT (Percent) Source: IMF staff calculations 240-6. Note: EA= euro area. Data labels use Intemational Organization for Standardization(ISo)country codes. Latest data available are for March 22, 2019 75--BRA 2:--2 65-RUS_TUR of Brexit negotiations Emerging market currencies generally strengthened, helped by the pause in interest rate hikes by the Federal Reserve and by the US-China trade dispute(Figure 1.8, panel 2). This 25 5 includes currencies that had come under more severe 15-lIli 80L1l1lililiLio pressure in previous months--primarily the argentine 2006081012141618:20060810 Q4 peso and the Turkish lira, but also the Brazilian real and the South African rand --as well as the Indian mber Finance L P Haver Analytics; IMF d the russian ruble. most other asian cu atistics(IFS); Thomson Reuters Datastream; and IMF staff calculation rencies also appreciated, with the Chinese renminbi Note: Data labels use International Organization for Standardization(ISOcountry codes stre ngthening by about 2 percent edit is other depository corporations claims on the private sector(from IFS), xcept in the case of Brazil, for which private sector credit is from the Monetary Capital flows: Improved market sentiment toward Policy and Financial System Credit Operations published by Banco Central do merging markets was reflected in a stabilization and Brasil, and China, for which credit is total social financing after adjusting for loca ubsequent recovery in portfolio fows, which had govemment debt swaps dropped sharply in the second and third quarters of Intemational Monetary Fund April 2019
6 WORLD ECONOMIC OUTLOOK: Growth Slowdown, Precarious Recovery International Monetary Fund | April 2019 of Brexit negotiations. Emerging market currencies generally strengthened, helped by the pause in interest rate hikes by the Federal Reserve and by the truce in the US–China trade dispute (Figure 1.8, panel 2). This includes currencies that had come under more severe pressure in previous months—primarily the Argentine peso and the Turkish lira, but also the Brazilian real and the South African rand—as well as the Indian rupee and the Russian ruble. Most other Asian currencies also appreciated, with the Chinese renminbi strengthening by about 2 percent. Capital flows: Improved market sentiment toward emerging markets was reflected in a stabilization and subsequent recovery in portfolio flows, which had dropped sharply in the second and third quarters of 1. 2. COL IDN MYS RUS TUR MEX (right scale) CHN MYS BRA COL IDN IND RUS TUR BRA CHN IND MEX China Emerging Asia excluding China Argentina Brazil Mexico Russia South Africa Turkey Figure 1.7. Emerging Market Economies: Equity Markets and Credit 5. 6. 3. 4. –15 –10 –5 0 5 10 15 20 25 2015 16 15 25 35 45 55 65 75 85 Credit-to-GDP Ratio1 (Percent) 80 100 120 140 160 180 200 220 240 0 5 10 15 20 25 30 2006 08 10 12 14 16 18: Q4 2006 08 10 12 14 16 18: Q4 17 2015 16 17 Jan. 19 Jan. 19 2015 16 17 18 Feb. 19 2015 16 17 18 –10 –5 0 5 10 15 20 Feb. 19 60 70 80 90 100 110 120 130 140 150 Equity Markets (Index, 2015 = 100) Emerging market equity indexes have recovered some of the ground lost in late 2018. Sources: Bloomberg Finance L.P.; Haver Analytics; IMF, International Financial Statistics (IFS); Thomson Reuters Datastream; and IMF staff calculations. Note: Data labels use International Organization for Standardization (ISO) country codes. 1 Credit is other depository corporations’ claims on the private sector (from IFS), except in the case of Brazil, for which private sector credit is from the Monetary Policy and Financial System Credit Operations published by Banco Central do Brasil, and China, for which credit is total social financing after adjusting for local government debt swaps. 70 80 90 100 110 120 130 140 150 160 170 Real Credit Growth1 (Year-over-year percent change) Latest over December 2018 December 2018 over September 2018 ZAF CHN IND IDN MYS PHL THA HUN POL RUS TUR ARG BRA CHL COL MEX PER PAK Source: IMF staff calculations. Note: EA = euro area. Data labels use International Organization for Standardization (ISO) country codes. Latest data available are for March 22, 2019. 2. Emerging Market Economies –15 –10 –5 0 5 10 15 20 25 1. Advanced Economies –4 –2 0 2 4 6 USA EA JPN GBR SWE CHE KOR TWN SGP CAN NOR AUS NZL Following a shift in market expectations about the pace and extent of US monetary policy tightening, the late-2018 appreciation of the dollar reversed and emerging market currencies generally strengthened. Figure 1.8. Real Effective Exchange Rate Changes, September 2018–March 2019 (Percent)
CHAPTER 1 GLOBAL PROSPECTS AND POLICIES Figure 1.9. Emerging Market Economies: Capital Flows Figure 1.10. Half-Yearly Growth Forecasts (Annualized semiannual percent change) Investors increased allocations to emerging market bond and equity funds in early The global outlook envisages a stabilization of growth in the first half of 2019 followed by a gradual recovery ing Market Funds Bond -EM-VXY a Equity 3.0-1. Advanced Economies 2. Emerging Market and 20 is lrish ECB CsiS China equity US presidential market sell-off 20101112131415161718Feb 19:20:2015: 12-(Percent of GDP ging Europe 4. Selected Emerging Market 6 MA ed states Euro area 二8x-Mc Total a ex a Saudi arabia China 20070809101112131415161718 15-3. Capital Outflows Excluding Change in Reserves Latin america H1 0um企 HHHMTHIMHL ource: IMF staff estimates Total Note: Em. Asia ex China= emerging and developing Asia excluding China. a Saudi arabia 08 09 10 11 12 13 14 15 16 17 18: 2018. The recovery was particularly notable in early 2019 as investors increased allocations to emerging 15-4. Change in Reserve market bond and equity funds( Figure 1.9) The forecast Near-Term Moderation, Then a Modest Pickup mm△ Industrial production figures and surveys of purchas- Saudi arabia ing managers suggest that the slower momentum in global growth during the second half of 2018 is likely 04 to continue in early 2019. The forecast envisages a stabilization of growth in the first half of the year and Sources: EPFR Global; Haver Analytics: IMF, Intemational Financial Statistics, a gradual recovery thereafter(Figure 1.10) ote: Capital inflows are net purchases of domestic assets by nonresidents. Reflecting the slowdown in activity in the latter half Capital outflows are net purchases of foreign assets by domestic residents. of 2018 and the first half of 2019, global growth is se lippines, and Thailand; emerging Europe comprises Poland, Romania to moderate from 3.6 percent in 2018 to 3.3 percent in 2019, and then to return to 3.6 percent in 2020 ECB=European Central Bank; EM-VXY=J. P. Morgan Emerging Market The forecast for 2019 is 0.4 percentage point lower Index; LTROs= long-term refinancing operations. than in the October 2018 WEO, while the forecast for 2020 is 0.1 percentage point lower(Table 1.1) International Monetary Fund April 2019
7 CHAPTER 1 Glob al Prospects and Policies International Monetary Fund | April 2019 2018. The recovery was particularly notable in early 2019 as investors increased allocations to emerging market bond and equity funds (Figure 1.9). The Forecast Near-Term Moderation, Then a Modest Pickup Industrial production figures and surveys of purchasing managers suggest that the slower momentum in global growth during the second half of 2018 is likely to continue in early 2019. The forecast envisages a stabilization of growth in the first half of the year and a gradual recovery thereafter (Figure 1.10). Reflecting the slowdown in activity in the latter half of 2018 and the first half of 2019, global growth is set to moderate from 3.6 percent in 2018 to 3.3 percent in 2019, and then to return to 3.6 percent in 2020. The forecast for 2019 is 0.4 percentage point lower than in the October 2018 WEO, while the forecast for 2020 is 0.1 percentage point lower (Table 1.1). Bond EM-VXY Equity Emerging Europe Emerging Asia excluding China Latin America China Saudi Arabia Total Emerging Europe Emerging Asia excluding China Latin America China Saudi Arabia Total Emerging Europe Emerging Asia excluding China Latin America China Saudi Arabia Total Figure 1.9. Emerging Market Economies: Capital Flows Investors increased allocations to emerging market bond and equity funds in early 2019. Sources: EPFR Global; Haver Analytics; IMF, International Financial Statistics; Thomson Reuters Datastream; and IMF staff calculations. Note: Capital inflows are net purchases of domestic assets by nonresidents. Capital outflows are net purchases of foreign assets by domestic residents. Emerging Asia excluding China comprises India, Indonesia, Malaysia, the Philippines, and Thailand; emerging Europe comprises Poland, Romania, Russia, and Turkey; Latin America comprises Brazil, Chile, Colombia, Mexico, and Peru. ECB = European Central Bank; EM-VXY = J.P. Morgan Emerging Market Volatility Index; LTROs = long-term refinancing operations. –40 –30 –20 –10 0 10 20 30 40 –6 –3 0 3 6 9 12 15 –6 –3 0 3 6 9 12 15 –6 –3 0 3 6 9 12 15 2007 08 09 10 11 12 13 14 15 16 17 18: Q4 2010 11 12 13 14 15 16 17 18 Feb. 19 1. Net Flows in Emerging Market Funds (Billions of US dollars) 2. Capital Inflows (Percent of GDP) 3. Capital Outflows Excluding Change in Reserves (Percent of GDP) 4. Change in Reserves (Percent of GDP) Taper tantrum Greek crisis Irish crisis 1st ECB LTROs 18: Q4 2007 08 09 10 11 12 13 14 15 16 17 18: Q4 2007 08 09 10 11 12 13 14 15 16 17 China equity market sell-off US presidential election United States Euro area Japan Argentina Mexico Brazil Turkey China Em. Asia ex. China Figure 1.10. Half-Yearly Growth Forecasts (Annualized semiannual percent change) 3. Selected Advanced Economies 4. Selected Emerging Market and Developing Economies –1 0 1 2 3 4 5 2. Emerging Market and Developing Economies 1. Advanced Economies 1.0 1.5 2.0 2.5 3.0 The global outlook envisages a stabilization of growth in the first half of 2019 followed by a gradual recovery. Source: IMF staff estimates. Note: Em. Asia ex. China = emerging and developing Asia excluding China. 3.5 6.0 4.0 4.5 5.0 5.5 17: H1 19: H1 20: H2 –10 –5 0 5 10 15 20 25 2015: H1 17: H1 19: H1 20: H2 2015: H1 17: H1 19: H1 20: H2 2015: H1 17: H1 19: H1 20: H2 2015: H1
WORLD ECONOMIC OUTLOOK: GROWTH SLOWDOWN, PRECARIOUS RECOVERY Table 1.1. Overview of the World Economic Outlook Projections Percent change, unless noted otherwise) Difference from January Difference from October 19 WEO Upd World output 0.1 Advanced Economies 0.0 United States 23 1.9 0.1 Euro area 1.8 1.5 3 0 6 0.2 1.1-0.2 0.8 -0.1 1.4 0.2 0.1 18 00 Other Advanced Economies 6 0.3 0 0.0 Emerging Market and Developing Economies 44 0.1 0.1 0.3 28 23 ussIa 0.1 Excluding Russia 0.0 0.1 0.0 Emerging and Developing Asia 6.3 0.2 0.1 ASEAN-54 erica and the caribbean -0.6 0.1 0.3 20 1.9 05 0.3 0.8 Middle East, North Africa, Afghanistan, and Pakistan 1.8 1.5 3.2 0.2 Saudi arabia 22 2.1 06 0.2 Sub-Saharan africa 0 0.2 Nigeria South africa 08 -0 0 Memorandum Union 2.1 0.3 -04-0.1 LoW-Income Developing Countries 4.6 5.1 World Trade volume(goods and services 0.1 06 0.2 Advanced Economies 3.0 1.1 0.1 1.0 0.3 Emerging Market and Developing Economies 4.6 0 0.2 Advanced Economies 27 3.1 0.2 03 4 03 Emerging Market and developing Economies 4.3 4.0 4.8 0 0.0 08 ommodity Prices(US dollars 294 13.4 125 Nonfuel (average based on world commodity export 0.8 Consumer prices 0.1 Emerging Market and Det 4.8 0.1 0.3 London Interbank Offered Rate(percent) On US Dollar Deposits(six month) 5 3.8 0.2 -0.1 On Euro Deposits (three month 0 On Japanese Yen Deposits(six month) Note: Real effective exchange rates are assumed to remain constant at the levels prevailing during January 14-February 11, 2019. Economies are listed on the basis of economic size. The aggregated quarterly data are seasonally adjusted WEO= Ward Economic Outlook Difference based on rounded figures for the current, January 2019 World Economic Outook Update, and October 2018 Warld Economic Outiook forecasts. The differences are also adjusted to include argentina's consumer pnces since the July 2018 Update 2Excludes the Group of Seven(Canada, France, Germany, Italy, Japan, United Kingdom, United States)and euro area countries. 3For India, data and forecasts are presented on a fiscal year basis and gDP from 2011 onward is based on GDP at market prices with fiscal year 2011/12 as a base Indonesia, Malaysia, Philippines, Thailand, Vietnam. Intemational Monetary Fund April 2019
8 WORLD ECONOMIC OUTLOOK: Growth Slowdown, Precarious Recovery International Monetary Fund | April 2019 Table 1.1. Overview of the World Economic Outlook Projections (Percent change, unless noted otherwise) 2018 Projections Difference from January 2019 WEO Update1 Difference from October 2018 WEO1 2019 2020 2019 2020 2019 2020 World Output 3.6 3.3 3.6 –0.2 0.0 –0.4 –0.1 Advanced Economies 2.2 1.8 1.7 –0.2 0.0 –0.3 0.0 United States 2.9 2.3 1.9 –0.2 0.1 –0.2 0.1 Euro Area 1.8 1.3 1.5 –0.3 –0.2 –0.6 –0.2 Germany 1.5 0.8 1.4 –0.5 –0.2 –1.1 –0.2 France 1.5 1.3 1.4 –0.2 –0.2 –0.3 –0.2 Italy 0.9 0.1 0.9 –0.5 0.0 –0.9 0.0 Spain 2.5 2.1 1.9 –0.1 0.0 –0.1 0.0 Japan 0.8 1.0 0.5 –0.1 0.0 0.1 0.2 United Kingdom 1.4 1.2 1.4 –0.3 –0.2 –0.3 –0.1 Canada 1.8 1.5 1.9 –0.4 0.0 –0.5 0.1 Other Advanced Economies2 2.6 2.2 2.5 –0.3 0.0 –0.3 0.0 Emerging Market and Developing Economies 4.5 4.4 4.8 –0.1 –0.1 –0.3 –0.1 Commonwealth of Independent States 2.8 2.2 2.3 0.0 0.0 –0.2 –0.1 Russia 2.3 1.6 1.7 0.0 0.0 –0.2 –0.1 Excluding Russia 3.9 3.5 3.7 –0.2 0.0 –0.1 0.0 Emerging and Developing Asia 6.4 6.3 6.3 0.0 –0.1 0.0 –0.1 China 6.6 6.3 6.1 0.1 –0.1 0.1 –0.1 India3 7.1 7.3 7.5 –0.2 –0.2 –0.1 –0.2 ASEAN-54 5.2 5.1 5.2 0.0 0.0 –0.1 0.0 Emerging and Developing Europe 3.6 0.8 2.8 0.1 0.4 –1.2 0.0 Latin America and the Caribbean 1.0 1.4 2.4 –0.6 –0.1 –0.8 –0.3 Brazil 1.1 2.1 2.5 –0.4 0.3 –0.3 0.2 Mexico 2.0 1.6 1.9 –0.5 –0.3 –0.9 –0.8 Middle East, North Africa, Afghanistan, and Pakistan 1.8 1.5 3.2 –0.9 0.2 –1.2 0.2 Saudi Arabia 2.2 1.8 2.1 0.0 0.0 –0.6 0.2 Sub-Saharan Africa 3.0 3.5 3.7 0.0 0.1 –0.3 –0.2 Nigeria 1.9 2.1 2.5 0.1 0.3 –0.2 0.0 South Africa 0.8 1.2 1.5 –0.2 –0.2 –0.2 –0.2 Memorandum European Union 2.1 1.6 1.7 –0.3 –0.1 –0.4 –0.1 Low-Income Developing Countries 4.6 5.0 5.1 –0.1 0.0 –0.2 –0.2 Middle East and North Africa 1.4 1.3 3.2 –0.9 0.3 –1.2 0.3 World Growth Based on Market Exchange Rates 3.1 2.7 2.9 –0.3 0.0 –0.4 0.0 World Trade Volume (goods and services) 3.8 3.4 3.9 –0.6 –0.1 –0.6 –0.2 Imports Advanced Economies 3.3 3.0 3.2 –1.1 –0.1 –1.0 –0.3 Emerging Market and Developing Economies 5.6 4.6 5.3 –0.5 –0.3 –0.2 –0.2 Exports Advanced Economies 3.1 2.7 3.1 –0.2 –0.3 –0.4 –0.3 Emerging Market and Developing Economies 4.3 4.0 4.8 –0.5 0.0 –0.8 0.0 Commodity Prices (US dollars) Oil5 29.4 –13.4 –0.2 0.7 0.2 –12.5 4.2 Nonfuel (average based on world commodity export weights)6 1.6 –0.2 1.1 2.5 –0.1 0.5 0.8 Consumer Prices Advanced Economies 2.0 1.6 2.1 –0.1 0.1 –0.3 0.1 Emerging Market and Developing Economies7 4.8 4.9 4.7 –0.2 0.1 –0.3 0.1 London Interbank Offered Rate (percent) On US Dollar Deposits (six month) 2.5 3.2 3.8 0.0 0.0 –0.2 –0.1 On Euro Deposits (three month) –0.3 –0.3 –0.2 0.0 –0.2 –0.1 –0.3 On Japanese Yen Deposits (six month) 0.0 0.0 0.0 0.0 –0.1 –0.1 –0.1 Note: Real effective exchange rates are assumed to remain constant at the levels prevailing during January 14–February 11, 2019. Economies are listed on the basis of economic size. The aggregated quarterly data are seasonally adjusted. WEO = World Economic Outlook. 1Difference based on rounded figures for the current, January 2019 World Economic Outlook Update, and October 2018 World Economic Outlook forecasts. The differences are also adjusted to include Argentina’s consumer prices since the July 2018 Update. 2Excludes the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries. 3For India, data and forecasts are presented on a fiscal year basis and GDP from 2011 onward is based on GDP at market prices with fiscal year 2011/12 as a base year. 4Indonesia, Malaysia, Philippines, Thailand, Vietnam
CHAPTER 1 GLOBAL PROSPECTS AND POLICIES Table 1.1(continued) 04 over 048 24221817 Euro area 9855 1 7433 1.61.4 16090109 3025211.9 apan 1.005 Canada 48658 8871469925 31241.91.7 1.4 Emerging Market and Developing Economies 58700 23 Russia 1.6 1.61.7 0341.217 Excluding Russia 3.9 Emerging and Developing Asia 6.6 6.4 72717.375 7.6 ASEAN-54 54525152 5.1 5.3 Emerging and Developing Europe 6.0 3.6 28 6.2 2.1 29 Latin America and the caribbean 1.21.0 2.2 21.1 Middle East, North Africa, Afghanistan, and Pakistan 18 -i4401021 Sub-Saharan africa South africa 1.01.8 European Union 2.7 2.1 1.61.7 61.7 Low-lncome Developing Countries 494650 Middle east and north africa 1.8141332 World Growth Based on Market Exchange Rates 282828 World Trade Volume(goods and services) Advanced economies 4.33.33032 Emerging Market and Developing Economies 7.5 4.65.3 Advanced Economies 44312731 Emerging Market and Developing Economies 72434048 Commodity Prices(US dollars) 233294-134-02 19695-75-13 Nonfuel (average based on world commodity export eights) 641.6-0.2 Consumer Prices Advanced Economies 17201621 1.9 Emerging Market and Developing Economies? 4348494.7 434039 London Interbank Offered Rate(percent On US Dollar Deposits(six month) 1.5253238 On Euro Deposits(three month) 0303-0302 On Japanese Yen Deposits(six month) 00.00.00.0 rage of prices of UK Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in Us dollars a barrel t 2018: the assumed price, based on futures markets, is $59. 16 in 2019 and $59.02 in 2020 tarting with the January 2019 WEO Update, the IMF commodity price index and its sub-indices have been odity forecast revisions compare current projections with October 2018 projections, however, due to methodological and coverage changes, comparability is limited. Excludes Venezuela. See country-specific note for Venezuela in the"Country Notes"section of the Statistical Appendix. BFor World Output, the quarterly estimates and projections account for approximately 90 percent of annual world output at purchasing-power-parity weights or Emerging Market and Developing Economies, the quarterly estimates and projections account for approximately 80 percent of annual emerging market nd developing economies output at purchasing-power-parity weights International Monetary Fund April 2019
9 CHAPTER 1 Glob al Prospects and Policies International Monetary Fund | April 2019 Table 1.1 (continued) Year over Year Q4 over Q48 Projections Projections 2017 2018 2019 2020 2017 2018 2019 2020 World Output 3.8 3.6 3.3 3.6 4.0 3.4 3.5 3.6 Advanced Economies 2.4 2.2 1.8 1.7 2.6 2.0 1.8 1.8 United States 2.2 2.9 2.3 1.9 2.5 3.0 2.2 1.7 Euro Area 2.4 1.8 1.3 1.5 2.7 1.1 1.6 1.4 Germany 2.5 1.5 0.8 1.4 2.8 0.6 1.4 1.3 France 2.2 1.5 1.3 1.4 2.8 0.9 1.6 1.3 Italy 1.6 0.9 0.1 0.9 1.7 0.0 0.6 0.8 Spain 3.0 2.5 2.1 1.9 3.1 2.4 1.9 1.7 Japan 1.9 0.8 1.0 0.5 2.4 0.3 0.3 1.4 United Kingdom 1.8 1.4 1.2 1.4 1.6 1.4 1.0 1.5 Canada 3.0 1.8 1.5 1.9 2.9 1.6 1.8 1.8 Other Advanced Economies2 2.9 2.6 2.2 2.5 2.9 2.4 2.4 2.7 Emerging Market and Developing Economies 4.8 4.5 4.4 4.8 5.2 4.7 4.9 5.0 Commonwealth of Independent States 2.4 2.8 2.2 2.3 1.5 3.4 1.6 2.0 Russia 1.6 2.3 1.6 1.7 1.0 3.4 1.2 1.7 Excluding Russia 4.1 3.9 3.5 3.7 . . . . . . . . . . . . Emerging and Developing Asia 6.6 6.4 6.3 6.3 6.8 6.3 6.4 6.3 China 6.8 6.6 6.3 6.1 6.7 6.4 6.3 6.0 India3 7.2 7.1 7.3 7.5 8.1 6.8 7.2 7.6 ASEAN-54 5.4 5.2 5.1 5.2 5.4 5.1 5.3 5.3 Emerging and Developing Europe 6.0 3.6 0.8 2.8 6.2 0.7 2.1 2.9 Latin America and the Caribbean 1.2 1.0 1.4 2.4 1.3 0.3 2.0 2.2 Brazil 1.1 1.1 2.1 2.5 2.2 1.1 2.8 2.2 Mexico 2.1 2.0 1.6 1.9 1.5 1.7 2.0 1.6 Middle East, North Africa, Afghanistan, and Pakistan 2.2 1.8 1.5 3.2 . . . . . . . . . . . . Saudi Arabia –0.7 2.2 1.8 2.1 –1.4 4.0 1.0 2.1 Sub-Saharan Africa 2.9 3.0 3.5 3.7 . . . . . . . . . . . . Nigeria 0.8 1.9 2.1 2.5 . . . . . . . . . . . . South Africa 1.4 0.8 1.2 1.5 2.2 0.2 1.0 1.8 Memorandum European Union 2.7 2.1 1.6 1.7 2.8 1.6 1.7 1.7 Low-Income Developing Countries 4.9 4.6 5.0 5.1 . . . . . . . . . . . . Middle East and North Africa 1.8 1.4 1.3 3.2 . . . . . . . . . . . . World Growth Based on Market Exchange Rates 3.2 3.1 2.7 2.9 3.3 2.8 2.8 2.8 World Trade Volume (goods and services) 5.4 3.8 3.4 3.9 . . . . . . . . . . . . Imports Advanced Economies 4.3 3.3 3.0 3.2 . . . . . . . . . . . . Emerging Market and Developing Economies 7.5 5.6 4.6 5.3 . . . . . . . . . . . . Exports Advanced Economies 4.4 3.1 2.7 3.1 . . . . . . . . . . . . Emerging Market and Developing Economies 7.2 4.3 4.0 4.8 . . . . . . . . . . . . Commodity Prices (US dollars) Oil5 23.3 29.4 –13.4 –0.2 19.6 9.5 –7.5 –1.3 Nonfuel (average based on world commodity export weights)6 6.4 1.6 –0.2 1.1 3.5 –1.9 3.6 0.9 Consumer Prices Advanced Economies 1.7 2.0 1.6 2.1 1.7 1.9 1.9 1.9 Emerging Market and Developing Economies7 4.3 4.8 4.9 4.7 3.7 4.3 4.0 3.9 London Interbank Offered Rate (percent) On US Dollar Deposits (six month) 1.5 2.5 3.2 3.8 . . . . . . . . . . . . On Euro Deposits (three month) –0.3 –0.3 –0.3 –0.2 . . . . . . . . . . . . On Japanese Yen Deposits (six month) 0.0 0.0 0.0 0.0 . . . . . . . . . . . . 5Simple average of prices of UK Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in US dollars a barrel was $68.33 in 2018; the assumed price, based on futures markets, is $59.16 in 2019 and $59.02 in 2020. 6Starting with the January 2019 WEO Update, the IMF commodity price index and its sub-indices have been updated and have expanded coverage. The nonfuel commodity forecast revisions compare current projections with October 2018 projections, however, due to methodological and coverage changes, comparability is limited. 7Excludes Venezuela. See country-specific note for Venezuela in the “Country Notes” section of the Statistical Appendix. 8For World Output, the quarterly estimates and projections account for approximately 90 percent of annual world output at purchasing-power-parity weights. For Emerging Market and Developing Economies, the quarterly estimates and projections account for approximately 80 percent of annual emerging market and developing economies’ output at purchasing-power-parity weights