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IfW Press Release September 14, 2006
Boom in the World Economy is Coming to an End
Rapid growth in the world economy has continued into this year, and strong results for the first half of 2006 have led us to revise substantially upwards our forecast for the full year to 5.0 percent, from 4.5 percent in spring. However, with the growth momentum having shown signs of weakening already in most recent months and monetary conditions having deteriorated further, we expect growth to slow down to 4.4 percent next year. Capacity utilization will diminish, most notably in the U.S. with a significant reduction in the growth rate of household consumption expected. Inflation will decline slightly under the assumption of stable oil prices.