A number of assumptions have been adopted for the projections presented in the World Economic Outlook. It has been assumed (1) that real effective exchange rates will remain constant at their average levels during January 30-February 27, 2008, except for the currencies participating in the European exchange rate mechanism II (ERM II), which are assumed to remain constant in nominal terms relative to the euro; (2) that established policies of national authorities will be maintained (for specific assumptions about fiscal and monetary policies in industrial countries, see Box Al); (3) that the average price of oil will be $95.50 a barrel in 2008 and $94.50 a barrel in 2009, and remain unchanged in real terms over the medium term; (4) that the six-month London interbank offered rate (LIBOR) on U.S. dollar deposits will average 3.1 percent in 2008 and 3.4 percent in 2009; (5) that the three-month euro deposits rate will average 4.0 percent in 2008 and 3.6 percent in 2009; and (6) that the six-month Japanese yen deposit rate will yield an average of 1.0 percent in 2008 and of 0.8 percent in 2009. These are, of course, working hypotheses rather than forecasts, and the uncertainties surrounding them add to the margin of error that would in any event be involved in the projections. The estimates and projections are based on statistical information available through end-March 2008.
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