What Is the World Economic Outlook (WEO)?

What Is the World Economic Outlook (WEO)?

Let me explain the World Economic Outlook (WEO) directly: it's a comprehensive report that the International Monetary Fund (IMF) publishes twice a year.

In it, you'll find the IMF's estimates and forecasts for global output growth and inflation, along with real gross domestic product (GDP) growth, consumer prices, current account balances, and unemployment rates for the fund's 190 member countries, organized by region and development status. The WEO also features several chapters on selected pressing economic issues.

This data comes from IMF representatives' consultations with member countries and is stored in the WEO database. You can expect the full WEO in April and October, with less comprehensive updates following in July and January.

Key Takeaways

Here's what you need to know about the WEO: it's an IMF report that delivers output, inflation, employment, fiscal balances, and debt statistics for member countries.

The report is best known for its global growth forecasts; it summarizes the state of the global economy and highlights the most important recent developments.

The IMF publishes the WEO twice a year, relying on data from consultations with member countries' governments.

Additionally, the IMF releases two less comprehensive WEO Updates each year, three months after the main reports.

Understanding the World Economic Outlook

You should understand that the World Economic Outlook results from the IMF's systematic survey of macroeconomic conditions and prospects in member countries, combined with an analysis and forecast of global economic and financial developments.

As the IMF is a leading global financial organization deeply involved in macroeconomic analysis through its international lending programs, its data get widely cited. For that reason, the WEO's semiannual forecasts attract prominent headlines and close scrutiny from financial market analysts.

While the IMF has faced criticism over the impacts of its structural adjustment programs on the poor in debtor countries, among other issues, the WEO itself has been less controversial. It's prepared by the Fund's professional staff and incorporates input from the organization's executive directors before publication.

Example of World Economic Outlook

Take the World Economic Outlook from April 2022, titled 'War Sets Back the Global Recovery,' as an example: it lowered the IMF's global growth forecasts for 2022 and 2023 from an estimated 6.1% gain in 2021, which was a rebound from the COVID-19 downturn.

Due to Russia's invasion of Ukraine and the resulting rise in energy and commodity prices, the IMF adjusted its annual global growth forecast to 3.6% for both 2022 and 2023, down from 4.4% and 3.8% in the WEO update issued three months earlier.

That April 2022 edition included chapters on 'Global Prospects and Policies,' 'Private Sector Debt and the Global Recovery,' 'A Greener Labor Market: Employment, Policies, and Economic Transformation,' and 'Global Trade and Value Chains During the Pandemic.'

The first chapter featured charts showing the surge in grain prices in Q1 2022 and the exposure of European banks to Russia as a percentage of total assets by country.

An extensive statistical appendix provided a discussion of the fiscal policy assumptions used in the WEO's economic projections for selected countries, along with tables for past and projected output growth, consumer prices, fiscal and debt balances by country.