EmailWorld Output 2011: Lowered to +4.0% from +4.3%; 2012 lowered to +4.0%
from +4.5%
Advanced Economies: Lowered to +1.6% from +2.2%; 2012 lowered to 1.9%
from +2.6% (biggest drop in U.S.)
U.S.: 2011 Lowered to 1.5% from 2.5%; 2012 lowered to +1.8% from
+2.7%
Euro Area: 2011 lowered to 1.6% from 2.0%; 2012 lowered to 1.1% from 2.0%
Worryingly, various consumer and business confidence indicators in advanced economies have retreated sharply, rather than strengthened as might have been expected in the presence of mostly temporary shocks that are unwinding.
WEO forecasts assume that the latest bout of volatility will not lead to large increases in saving rates and that it will delay, rather than derail, the normalization of lending conditions. Financial conditions remain supportive of growth in emerging and developing economies, notwithstanding higher volatility.
On balance, the evidence points to continued, uneven growth. Relative to the June 2011 WEO Update, the most noteworthy revision is the reduction in the real GDP growth forecast for the United States, by 1% point over 2011 and 2012. Other revisions for advanced economies generally range between 0.5-1.0%. The markdowns to most emerging and developing economies amount to about 0.5%.
