The world economy [March 2004]

Low, Kenneth (2004) The world economy [March 2004]. Quarterly Economic Commentary, 29 (1). pp. 8-11. ISSN 0306-7866

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Growth in the world economy is now clearly recovering with the US, Japan and China demonstrating strong economic growth. The US growth is considerably boosted by the decline in the US dollar but this will not continue in the medium-run. When US employment data shows a significant rise in employment then we can expect US interest rates to increase. Europe remains relatively weak but there are signs of recovery and we expect full recovery in the Euro Area by 2005. As in the previous QEC the forecasts for world growth have improved. There are very few inflationary pressures in the world economy. The outlook for the world economy is lightly better than in the previous quarter. Terrorist attacks in the west, the size of the US deficit and the continued weakness in Europe are the only downside risks of any significant concern.