World Economic Outlook October 2001: The Information Technology Revolution

Since the May outlook, prospects for 2001-02 have weakened further, and have been exacerbated by the 11 September terrorist attack in the United States. Growth projections for nearly all areas have reduced reflecting a variety of factors: delayed recovery in the USA; weakening domestic demand growth and confidence in Europe; slower growth in Japan as it presses ahead with structural reforms; the continued decline in information technology spending, which affects Asia in particular; deteriorating financing conditions for emerging markets, especially in Latin America. GDP growth is now slowing in all regions,accompanied by a sharp decline in trade growth. The recent terrorist attack has increased uncertainty, and the danger of a deeper and more prolonged slowdown remains. In addition to the review of prospects and policies, this report examines international linkages, financial integration and developing countries, and the information technology revolution.