Economic Survey, August 2003


A moderate international recovery is still expected to take off towards the end of the year and to gather further momentum in 2004. There are, however, only small and fragile signs of rising activity in USA and especially the euro area.

Economic growth in USA was in 2002 stimulated by large expansions in both monetary and fiscal policy, which also has a positive effect on growth in 2003. The expansion has supported private consumption and investments and postponed the needed adjustment of macroeconomic balances. The fiscal expansion since 2002 and lately related to the war in Iraq has led to a significant increase in the fiscal deficit.

Since the survey in May the depreciation of the dollar has continued, which has a positive impact on net export. On the other hand, growth prospects are weakened by higher oil prices. Combined with moderate growth in the first two quarters of this year GDP growth in USA is expected to be 2.1 per cent on average in 2003, cf. table 1.1. A downward revision of 0.3 percentage points compared to May.

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