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Email this citationCIAO DATE: 08/05
Global Economic Prospects: Slower But Still Solid Growth in 2005; Worries About Growth and Inflation for 2006
Jeffrey J. Schott and Gary Clyde Hufbauer
March 2005
Abstract
After surging to the highest growth rate in a generation, world real GDP is set to slow from a rate of just over 5 percent for 2004 to about 4 percent for 2005 and a tad slower for 2006. The economic slowdowns in several important economies in the second half of last year, including much of continental Europe and Japan, already make it clear that year-over-year growth will slow for 2005. But the continued strong growth of domestic demand in other countries, most notably the United States and China, virtually assures that global growth this year will not fall below potential.
Meanwhile, inflation has clearly begun to pick up in many areas of the world economy. This is most apparent in commodity prices, especially energy prices, particularly when commodities are priced in US dollars. It is also visible in broad indices of "core" inflation, which exclude or sharply de-emphasize volatile commodity prices.
