World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
WORLD ECONOMIC SITUATION AND PROSPECTS 2006
UNITED NATIONS
24 January 2006
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
SLOW DOWN OF WORLD ECONOMY
12 10 8 6 4 2 0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
-2
GDP GDP at PPPs World trade
2
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
GROWTH IN DEVELOPING COUNTRIES HIGHER THAN IN DEVELOPED
9 8 7 6 5 4 3 2 1 0
Developed economies Economies in transition Developing economies Least developed countries
3
2004 2005 2006
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
US ECONOMY IS MODERATING…
5 4 3 2 1 0 United States Japan European Union
4
2004 2005 2006
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
… AND IN THE DEVELOPING WORLD, WITH CHINA AND INDIA STILL STRONG
10 8 6 4 2 0
Africa East Asia South Asia (excl. China) (excl. India) Latin America Western Asia China India
2004
2005
2006
5
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
Major downside risks
Global imbalances Higher oil prices Burst of housing prices Avian influenza pandemic
6
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
THE GLOBAL IMBALANCES ARE WIDENING…
400
Japan
200
Emerging Asia
EU + Norway, Switzerland
0
-200
Major oil exporters
Other developing & EIT
-400
-600
United States
-800
-1000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
7
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
26%
NO GLOBAL SAVING GLUT, BUT A GLOBAL INVESTMENT ANEMIA
24%
(% of W P) G
Investment
22%
Savings
20%
18% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
8
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
…THE DOLLAR STABILIZING?
150 1.20 1.10 1.00 0.90 0.80 0.70
1Q 00 1Q 01 1Q 02 1Q 03 1Q 04 1Q 05 1Q06
Euro/US$
140 130 120
Yen/US$
110 100 90
9
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
Policy coordination for addressing imbalances……
US: stimulate savings Surplus countries: encourage investment and consumption IMF: key role for broad international policy coordination
10
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
OIL PRICES HAVE ADVANCED FURTHER
US dollars per barrel
70 65 60 55 50 45 40 35 30 25 20 May May Jan-03 Jan-04 Jan-05 May Mar Mar Nov Nov Mar Sep Sep Sep Nov Jul Jul Jul
Brent
OPEC Basket
11
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
MOST NON-OIL COMMODITY PRICES ALSO INCREASED …
2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60
2000
2001
All commodities
2002
2003
2004
2005
Minerals, ores and metals Vegetables oilseeds and oils
Food and tropical beverages Agricultural raw materials
12
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
Major downside risks
Global imbalances Higher oil prices Burst of housing prices Avian influenza pandemic
13
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
YIELD SPREADS FOR DEVELOPING COUNTRIES EXCEPTIONALLY LOW …
20
15
Africa
10
Latin America
5
Asia
0
98- 98- 98- 98- 99- 99- 99- 99- 00- 00- 00- 00- 01- 01- 01- 01- 02- 02- 02- 02- 03- 03- 03- 03- 04- 04- 04- 04- 05- 05- 05- 05- 06Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan Apr Jul O ct Jan
14
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
… BUT NET FINANCIAL FLOWS REMAIN LIMITED …
200 175 150 125 100 75 50 25 0 -25 -50
1997 1998 1999 2000 2001 2002 2003 2004 2005
Billions of US Dollars
Developing
Economies in Transition
15
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
… AND NET FINANCIAL TRANSFERS FROM DEVELOPING COUNTRIES CONTINUE TO INCREASE
50 0 -50
Billions of US Dollars
-100 -150 -200 -250 -300 -350 -400 -450 -500 -550
1997
1998
1999
2000
2001
2002
2003
2004
2005
Developing
Economies in Transition
16
World Economic Situation and Prospects 2006 United Nations
United Nations, New York 24 January 2006 Department of Economic and Social Affairs Development Policy and Analysis Division
Galvanize trade, aid and finance for MDGs Modest progress in the Doha Round Expecting increase in ODA Deliver the 2005 Summit Outcome
17