International Monetary Fund

1. Global output, which averaged about 6 percent in late 2003 and early 2004, has moderated after a slowdown in industrial production and global trade because of higher oil prices and the start of more sustainable growth, according to the International Monetary Fund (IMF) in its April 2005 World Economic Outlook. Predictive indicators still support solid expansion in 2005, as growth would incur modest economic impact from the December 2004 tsunami and keeping in mind oil price changes.

2. Despite the overall trend, certain economies showed different patterns. While the U.S., China, and most emerging economies had strong growth expansion, Europe and Japan had disappointing growth because of falling exports and weak domestic demand. Global current account balances have increased, particularly with the U.S. posting an account deficit that comprised 5.7 percent of its GDP in 2004. As a result of the deficit and other factors, the U.S. dollar depreciated more, while industrial and emerging markets — particularly in some Asian countries — had their currencies appreciate.