PROSPECTS AND POLICY CHALLENGES

摘要

Since the May 2001 World Economic Outlook, prospects for 2001-02 have weakened further, and downside risks have been further exacerbated by the recent terrorist attack in the United States (see Box 1.1). Growth projections for almost all regions have been reduced, reflecting a variety of factors, including the greater-than-expected impact of the global slowdown in a number of regions; a delayed recovery in the United States; weakening domestic demand growth and confidence in Europe; the prospect of a period of slower growth in Japan as it presses ahead with structural reforms (although this will have substantial medium-term benefits); the continued decline in information technology spending, which affects Asia in particular; and deteriorating financing conditions for emerging markets, especially in Latin America. GDP growth is now slowing in almost all regions of the globe, accompanied by a sharp decline in trade growth. In response, many countries—especially the United States—have eased macroeconomic policies, most recently in mid-September in the aftermath of the terrorist attack. This easing, along with the gradual abatement of oil prices and of other shocks that have contributed to the slowdown, should help support activity and confidence in the period ahead. But substantial uncertainties and risks persist, as the downturn makes the world more vulnerable to further unexpected developments, and a significant danger of a deeper and more prolonged slowdown remains. The recent terrorist attack has also increased uncertainty. The challenge facing policymakers is how best to limit these downside risks while promoting an orderly resolution of the imbalances in the globa economy over the medium term.