International Economic Outlook1

The outlook for world economic growth has improved noticeably in recent months. On the back of an improvement in Japan and recovery in most Asian economies, world output in 1999 is expected to be around of a percentage point stronger than forecast at Budget. Growth is expected to remain strong in the US and this will continue to underpin world economic activity in 1999. In 2000, world growth is expected to lift further, reflecting stronger recoveries in Japan, Europe and most of the Asian economies. A similar result is expected overall in 2001, although growth in the US is anticipated to moderate.


World GDP Growth at Market Exchange Rates



International GDP Growth Forecasts

(a) European Union, Non-Japan East Asia and World GDP growth rates are calculated using GDP weights based on market exchange rates. The weights used in the forecasts are a 3-year moving average up to 1998.
(b) European Union economies are Germany, France, the United Kingdom, Italy, Belgium, the Netherlands, Greece, Denmark, Sweden, Luxembourg, Austria, Spain, Portugal, Finland and Ireland.
(c) Non-Japan East Asia economies are Korea, Singapore, Taiwan, Hong Kong, China, Indonesia, Malaysia, Thailand and the Philippines.
(d) Major Trading Partner (MTP) growth is calculated using weights based on merchandise exports as a percentage of total exports to MTP countries over the three fiscal years to 1998-99.

Key Features
Fiscal Outlook
Domestic Economic Outlook
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1..Since the MYEFO forecasts were finalised, the US has released a comprehensive revision to their National Accounts. The methodological changes have moderately increased the long-term average rate of growth, with revisions extending back to 1959.