This Working Paper presents a medium-term macroeconomic outlook for the major economic areas of the world. The outlook was prepared using nime, the Belgian Federal Planning Bureau’s (fpb) macroeconometric world model. The Working Paper also features an assessment of the euro area’s progress towards the European Union’s Lisbon goals for growth and employment, a brief description of the nime model and an appendix outlining the major technical assumptions of this outlook.
This outlook extends the previous nime World Economic Outlook’s horizon from 2010 to 2011 and it updates the previous outlook following the release of new data, the re-estimation of the model’s equations and a refinement of the model’s demographic assumptions. The latter are now firmly based on the United Nations’ most recent “World Population Prospects”. Indeed, the new projection now integrates the slowdown in world population growth rates, as well as the ageing phenomenon, especially in areas such as Japan and, to a lesser extent, the euro area.
The outlook presented in this Working Paper builds on the latest Economic Forecasts of the European Commission. Indeed, the nime model is basically medium-term-oriented and is thus calibrated to replicate the business cycle data for 2004 as presented in the ec’s Autumn 2004 Economic Forecasts. However, as explained in the technical appendix, the ameco data for 2004 have been updated for developments in financial markets up to the end of 2004. The nime outlook then goes on to provide a coherent model-based outlook up to 2011 for the major economic areas of the world.
Finally, the reader should be aware that this outlook does not necessarily constitute the reference scenario for work carried out at the fpb. A case in point are the fpb’s short-term forecasts and medium-term projections for the Belgian economy, for which the underlying international economic scenario is traditionally based on various sources.