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The World Economy

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In September, the International Monetary Fund (IMF) published its second biannual World Economic Outlook. The Outlook predicts that aggregate real GDP for the 175 countries covered will grow 5.0% in 2004, the highest world growth rate in nearly three decades. It also expects that growth will moderate to 4.3% in 2005, partly because of rapidly rising oil costs. According to many standard economic models, including the IMF’s, an oil price increase of $8 per barrel reduces global GDP growth by about 0.5%. After the Outlook was published, spot and futures oil prices rose above their September levels.

Suggested citation: "The World Economy." Federal Reserve Bank of Cleveland, Economic Trends, no. 04-11, p. 8-9, 11.01.2004.

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