Following some signs of stabilization at the end of 2002, global economic growth is expected to improve in 2003, but the strength, breadth and sustainability of the recovery remain subject to many uncertainties. Risks associated with heightened geopolitical tensions, such as the possibility of higher oil prices and lower business and consumer confidence, are the key threats to global economic recovery in the short run. In such a global economic environment, policymakers are facing prodigious challenges. Macroeconomic policy worldwide has been generally accommodative over the past year and has helped prevent the world economy from falling farther into a synchronized global downturn.

The present global economic weakness could be aggravated by prevailing uncertainties, to the particular detriment of many of the world's poorest. Bringing about a robust and sustained recovery in world economic growth should therefore be the top priority for macroeconomic policies in most economies in 2003. Over the longer run, further structural reforms are needed so that both national economies and the international trade and financial systems contribute to higher and more balanced growth.

Sales No. E.03.II.C.2
ISBN 92-1-109144-6

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