IfW Press Release March 13, 2007
Robust World Economic Expansion
Global economic growth is expected to remain at historically high levels this year and next. We have raised our forecast for the increase in world output to 4.7 percent, from 4.4 percent in the forecast of last September. Next year the world economy is expected to expand at a similar rate. This optimistic outlook is supported by the development of potential output growth in the world economy which we estimate to have increased significantly over recent years. The cyclical divergence within the group of industrial countries that has emerged last year is expected to continue in 2007. While capacity utilization in the US will decline further well into next year, real GDP growth should continue to outpace the increase in potential output in Japan and in the European Union. Monetary tightening will slow down the European economies visibly only in 2008.
Prof. Dr. Joachim Scheide
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