country and regional perspectives
As discussed in Chapter 1, the global recovery is continuing, but its strength is not yet assured. Economic prospects remain uneven acrosscountries and regions (Figure 2.1). In general, the pace of recovery is expected to be faster in economies that had stronger fundamentals before the crisis, smaller output losses during it, and now have moreroom for policy maneuver and deep links with fast-growing trading partners.1 China’s increasingly wide trading network is driving growth prospects in numerous economies, especially commodityexporters. Strong internal dynamics are supporting near-term growth in other emerging economies, too. However, economic prospects are subdued in major advanced economies, where much-needed policy adjustmentshave only just begun—in the form of financial sector repair and reform and medium1See Chapter 2 of the April 2010 World Economic Outlook and IMF (2010a).
term fiscal consolidation. This will weighon growth in emerging economies, raising the need to boost domestic sources of demand. At the same time, capital will continue to flow toward strong emerging and developing economies, induced byrelatively good growth prospects and favorable interest rate differentials. This chapter begins with Asia, which is leading the global recovery. Then it turns to North America, where there is renewedconcern that the recovery may be stalling, with significant implications for the rest of the world. Next, the chapter reviews Europe’s economic and policy challenges, which in many ways mirror those at theglobal level: the need for demand rebalancing within the region, financial sector repair, and medium-term fiscal consolidation. It then outlines the wide range of developments and prospects in LatinAmerica and the Caribbean (LAC), the Commonwealth of Independent States (CIS), the Middle East and North Africa (MENA), and subSaharan Africa.
Figure 2.1. Average Projected Real GDP Growth during...