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Global Economic Prospects, January 2013 : Assuring Growth Over the Medium Term

accounting arbitrage assets bailout bank lending Bank Loans banking systems basis points binding constraint bond bond issuance Bond Issues bond spreads Bond Yields bonds borrowing costs budget constraint buffers business confidence capacity constraints capital constraints capital goods capital inflows capital markets Capital outflows capital requirements capitalization CDS central bank Commodities commodity commodity markets commodity price commodity prices commodity traders consumer demand consumer goods consumer spending Copyright Clearance Copyright Clearance Center country capital country debt country Equity Credit Default Credit Default Swap credit squeeze credit squeezes crisis countries Current account balance current account balances current account deficit current account deficits debt Debt data debt flows debt levels debt obligations debt restructuring debt stocks debts decline in investment deposits developing countries developing country Developing country Equity developing economies developing economy domestic markets downside scenario durable durables Economic developments Emerging Markets Emerging-market Equities equity issuance Equity Issues Equity market Equity markets exchange rate Exchange Rates expenditure expenditures export growth export value Interest Rates exporter exporters exposures external shocks financial crises financial crisis financial institutions financial integration financial market financial markets financial sector financial sector developments financial sectors financial systems financing requirements fiscal consolidation fiscal deficits fiscal policies fiscal policy food price food prices foreign banks foreign currency Global Economy global finance global financial markets global financial systems global output global trade Government account government accounts Government budget government debt government deficit government deficits government expenditure government expenditures government revenue government revenues government spending Gross debt growth rate growth rates High-Income Countries high-income country household savings human capital import import demand Income income growth incomes Inflation inflation rates inflationary pressures interest rates International Bank international business International capital International capital flows international financial institutions international financial markets international reserves International Settlements International Trade investing investment activity investment spending lenders level of risk loan local currency low-income countries macroeconomic policies macroeconomic policy Macroeconomic vulnerabilities market conditions market price market prices Market regulators maturity middle-income countries Monetary Fund monetary policies monetary policy natural disasters Net capital oil commodities oil price oil prices Output Output Gap output gaps political stability political uncertainty Portfolio portfolio capital post-crisis period power parity private banks Private creditors Private debt private inflows public spending purchasing power purchasing power parity rate of growth real interest real interest rates Regional trade regulators remittances reserve return risk assessments risk aversion savings savings rate short-term debt small countries sovereign debt stock markets sustainable growth technological change trade deficit trade finance trading transition countries Treasury Treasury Yields value index volatile capital volatility weights withdrawal world economy World Trade
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Washington, DC
Africa | East Asia and Pacific | Europe and Central Asia | Latin America & Caribbean | South Asia | Middle East and North Africa | Africa | America | Caribbean | East Asia | Europe | North Africa | North America | South Asia | Middle East | Europe and Central Asia | Europe, Middle East and North Africa | World | European Union | Latin America | UNITED STATES
2013-01-16T16:42:37Z | 2013-01-16T16:42:37Z | 2013-01-15

More than four years after the global financial crisis hit, high-income countries struggle to restructure their economies and regain fiscal sustainability. Developing countries, where growth is 1-2 percentage points below what it was during the pre-crisis period, have been affected by the weakness in high-income countries. To regain pre-crisis growth rates, they will need to focus on productivity-enhancing domestic policies rather than demand stimulus. Although the major risks to the global economy are similar to those of a year ago, the likelihood that they will materialize has diminished, as has the magnitude of estimated impacts should these events occur. Major downside risks include the loss of access to capital markets by vulnerable Euro Area countries, lack of agreement on U.S. fiscal policy and the debt ceiling, and commodity price shocks. In an environment of slow growth and continued volatility, a steady hand is required in developing countries to avoid pro-cyclical policy and to rebuild macroeconomic buffers so that authorities can react in the case of new external or domestic shocks.

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