The NIME Economic Outlook for the World Economy 2004 - 2010 (Also in this issue: oil price shocks) [ Working Paper 16-04 - 08/10/2004]

The Belgian Federal Planning Bureau (fpb) has a long tradition of using macro-econometric models, to study both the Belgian economy and the international economic environment. Alongside the modtrim and hermes models, which are used regularly for detailed analyses and projections of the Belgian economy, the fpb also makes regular use of large-scale macro-econometric multi-country models such as nemesis and nime. These models have helped the fpb broaden its understanding of international economic developments, and to assess the risks pertaining to the underlying international economic environment in the fpb’s projections of the Belgian economy.

The outlook presented in this Working Paper builds on and complements the forecasts made by other institutions. Indeed, since the nime model essentially focuses on the medium-term, it is currently calibrated to replicate the available business cycle data for 2004, as presented by the European Commission in its latest short-term Economic Forecasts. The nime outlook then goes on to provide a coherent model-based outlook up to 2010 for the major economic areas of the world.

The outlook presented in this Working Paper is also to be viewed as a baseline, providing insights into potential developments linked to world macro-economic imbalances as well as a coherent basis for variant analyses. The reader should be aware however, that the fpb uses various sources for the assumptions it retains regarding the underlying international economic environment of its short-term forecasts and medium-term projections for the Belgian economy.