World Economic Outlook, October 2019: October 2019, global manufacturing downturn, rising trade barriers (World economic and financial surveys)

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Global growth is forecast at 3.0 percent for 2019, its lowest level since 2008-09 and a 0.3 percentage point downgrade from the April 2019 World Economic Outlook. Cover CONTENTS Assumptions and Conventions Further Information Data Preface Foreword Executive Summary Chapter 1. Global Prospects and Policies Subdued Momentum, Weak Trade and Industrial Production Weakening Growth Muted Inflation Volatile Market Sentiment, Monetary Policy Easing Global Growth Outlook: Modest Pickup amid Difficult Headwinds Growth Forecast for Advanced Economies Growth Forecast for Emerging Market and Developing Economies Inflation Outlook External Sector Outlook Risks: Skewed to the Downside Policy Priorities Scenario Box 1.1. Implications of Advanced Economies Reshoring Some Production Scenario Box 1.2. Trade Tensions: Updated Scenario Box 1.1. The Global Automobile Industry: Recent Developments and Implications for the Global Outlook Box 1.2. The Decline in World Foreign Direct Investment in 2018 Box 1.3. Global Growth Forecast: Assumptions on Policies, Financial Conditions, and Commodity Prices Box 1.4. The Plucking Theory of the Business Cycle Special Feature: Commodity Market Developments and Forecasts Box 1.SF.1. What’s Happening with Global Carbon Emissions? References Chapter 2. Closer Together or Further Apart? Within-Country Regional Disparities and Adjustment in Advanced Economies Introduction Regional Development and Adjustment: A Primer Patterns of Regional Disparities in Advanced Economies Regional Labor Market Adjustment in Advanced Economies Regional Labor Mobility and Factor Allocation: Individual and Firm-Level Evidence Summary and Policy Implications Box 2.1. Measuring Subnational Regional Economic Activity and Welfare Box 2.2. Climate Change and Subnational Regional Disparities Box 2.3. The Persistent Effects of Local Shocks: The Case of Automotive Manufacturing Plant Closures Box 2.4. Place-Based Policies: Rethinking Fiscal Policies to Tackle Inequalities within Countries References Chapter 3. Reigniting Growth in Low-Income and Emerging Market Economies: What Role Can Structural Reforms Play? Introduction Structural Policy and Reform Patterns in Emerging Market and Developing Economies The Macroeconomic Effects of Reforms in Emerging Market and Developing Economies Accounting for Differences across Countries Summary and Policy Implications Box 3.1. The Political Effects of Structural Reforms Box 3.2. The Impact of Crises on Structural Reforms References Statistical Appendix Assumptions What’s New Data and Conventions Country Notes Classification of Countries General Features and Composition of Groups in the World Economic Outlook Classification Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2018 Table B. Advanced Economies by Subgroup Table C. European Union Table D. Emerging Market and Developing Economies by Region and Main Source of Export Earnings Table E. Emerging Market and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries and Low-Income Developing Countries Table F. Economies with Exceptional Reporting Periods Table G. Key Data Documentation Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies List of Tables Output (Tables A1–A4) Inflation (Tables A5–A7) Financial Policies (Table A8) Foreign Trade (Table A9) Current Account Transactions (Tables A10–A12) Balance of Payments and External Financing (Table A13) Flow of Funds (Table A14) Medium-Term Baseline Scenario (Table A15) World Economic Outlook, Selected Topics IMF Executive Board Discussion of the Outlook, October 2019 Tables Table 1.1. Overview of the World Economic Outlook Projections Table 1.SF.1. Official Gold Reserves Table 1.SF.2. Precious Metals Production, 2016–18 Table 1.SF.3. Relative Rarity Table 1.SF.4. World Average Inflation Betas Table 1.SF.5. Determinants of One-Month Return on Precious Metals Table 1.SF.6. Asset Returns Associated with Largest Single-Day Changes in the S&P 500 Index Annex Table 1.1.1. European Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment Annex Table 1.1.2. Asian and Pacific Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment Annex Table 1.1.3. Western Hemisphere Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment Annex Table 1.1.4. Middle East and Central Asia Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment Annex Table 1.1.5. Sub-Saharan African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment Annex Table 1.1.6. Summary of World Real per Capita Output Table 2.4.1. Examples of Place-Based Policies Figures Figure 1. GDP Growth: World and Group of Four Figure 1.1. Global Activity Indicators Figure 1.2. Contribution to Global Imports Figure 1.3. Global Investment and Trade Figure 1.4. Spending on Durable Goods Figure 1.5. Global Purchasing Managers’ Index and Consumer Confidence Figure 1.6. Global Inflation Figure 1.7. Wages, Unit Labor Costs, and Labor Shares Figure 1.8. Commodity Prices Figure 1.9. Advanced Economies: Monetary and Financial Market Conditions Figure 1.10. Emerging Market Economies: Interest Rates and Spreads Figure 1.11. Emerging Market Economies: Equity Markets and Credit Figure 1.12. Emerging Market Economies: Capital Flows Figure 1.13. Real Effective Exchange Rate Changes, March 2019–September 2019 Figure 1.14. Global Growth Figure 1.15. Emerging Market and Developing Economies: Per Capita Real GDP Growth Figure 1.16. Sub-Saharan Africa: Population in 2018 and Projected Growth Rates in GDP per Capita, 2019–24 Figure 1.17. Global Current Account Balance Figure 1.18. Current Account Balances in Relation to Economic Fundamentals Figure 1.19. Net International Investment Position Figure 1.20. Tech Hardware Supply Chains Figure 1.21. Policy Uncertainty and Trade Tensions Figure 1.22. Geopolitical Risk Index Figure 1.23. Probability of One-Year-Ahead Global Growth of Less than 2.5 Percent Scenario Figure 1.1.1. Advanced Economies Reshoring Scenario Figure 1.2.1. Real GDP Figure 1.1.1. Global Vehicle Industry: Share of Total, 2018 Figure 1.1.2. Global Vehicle Industry: Structure of Production, 2014 Figure 1.1.3. Global Vehicle Production Figure 1.1.4. World Passenger Vehicle Sales and Usage Figure 1.2.1. Advanced Economies: Financial Flows Figure 1.2.2. Foreign Direct Investment Flows Figure 1.2.3. Emerging Markets: Financial Flows Figure 1.3.1. Forecast Assumptions: Fiscal Indicators Figure 1.3.2. Commodity Price Assumptions and Terms-of-Trade Windfall Gains and Losses Figure 1.4.1. An Illustration of the Plucking Theory Figure 1.4.2. Unemployment Dynamics in Advanced Economies Figure 1.SF.1 Commodity Market Developments Figure 1.SF.2. Gold and Silver Prices Figure 1.SF.3. Macro Relevance of Precious Metals Figure 1.SF.4. Share of Total Demand Figure 1.SF.5. Correlation: Precious Metals, Copper, and Oil Figure 1.SF.6. Precious Metals versus Consumer Price Index Inflation Figure 1.SF.1.1. Contribution to World Emissions, by Location Figure 1.SF.1.2. Contribution to World Emissions, by Source Figure 2.1. Subnational Regional Disparities and Convergence over Time Figure 2.2. Distribution of Subnational Regional Disparities in Advanced Economies Figure 2.3. Subnational Regional Unemployment and Economic Activity in Advanced Economies, 1999–2016 Figure 2.4. Demographics, Health, Human Capital, and Labor Market Outcomes in Advanced Economies: Lagging versus Other Regions Figure 2.5. Inequality in Household Disposable Income within Advanced Economies Figure 2.6. Subnational Regional Disparities in Real GDP per Capita Figure 2.7. Shift-Share Variance Decomposition, by Country, 2003–14 Figure 2.8. Sectoral Labor Productivity and Employment Shares: Lagging versus Other Regions Figure 2.9. Labor Productivity: Lagging versus Other Regions Figure 2.10. Regional Effects of Import Competition Shocks Figure 2.11. Regional Effects of Automation Shocks Figure 2.12. Regional Effects of Trade and Technology Shocks Conditional on National Policies Figure 2.13. Subnational Regional Migration and Labor Mobility Figure 2.14. Effects of National Structural Policies on Subnational Regional Dispersion of Capital Allocative Efficiency Figure 2.1.1. Subnational Regional Disparities: Before and after Regional Price Adjustment Figure 2.2.1. Marginal Effect of 1°C Increase in Temperature on Sectoral Labor Productivity Figure 2.2.2. Change in Labor Productivity of Lagging versus Other Regions Due to Projected Temperature Increases between 2005 and 2100 Figure 2.3.1. Associations between Automotive Manufacturing Plant Closures and Unemployment Rates Figure 2.4.1. Effects of Fiscal Redistribution by Conventional versus Spatially Targeted Means-Tested Transfers Figure 3.1. Speed of Income-per-Capita Convergence in Emerging Markets and Low-Income Developing Countries Figure 3.2. Reform Intensity and Speed of Income-per-Capita Convergence in Selected Economies Figure 3.3. Overall Reform Trends Figure 3.4. Reform Trends, by Area Figure 3.5. Overall Reform Trends across Different Geographical Regions Figure 3.6. Regulatory Indices, by Country Income Groups Figure 3.7. Regulatory Indices, by Geographical Regions Figure 3.8. Average Effects of Reforms Figure 3.9. Industry-Level Effect of Domestic and External Finance Reforms on Output Figure 3.10. Output Gains from Major Historical Reforms: Model-Based versus Empirical Estimates Figure 3.11. Effects of Reforms: The Role of Macroeconomic Conditions Figure 3.12. Effects of Reforms on Output: The Role of Informality Figure 3.13. Model-Implied Gains from Reforms: The Role of Informality Figure 3.14. Effect of Reforms on Informality Figure 3.15. Effects of Reforms on Output: The Role of Governance Figure 3.16. Gain from Packaging Domestic Finance and Labor Market Reforms Figure 3.1.1. The Effect of Reform on Electoral Outcomes Figure 3.1.2. The Effect of Reform on Vote Share: The Role of Economic Conditions Figure 3.2.1. The Effect of Crises on Structural Reforms