Economic Survey, December 2003


Increasingly clear signs of an international upturn have emerged in the second half of 2003. The budding global recovery is supported by record-low monetary policy rates, reduced geo-political uncertainties and fiscal stimulus in the United States.

The international recovery is led by the United States, where the economy grew strongly in the third quarter. In the euro area signs of rising activity are also more promising than earlier this year and activity showed a moderate pick up in the third quarter.

The US economy is expected to grow by 2.8 per cent on average in 2003 and by 3.8 per cent in 2004, cf. table 1.1. This is an upward revision of 0.9 and 1.3 percentage points compared to the Economic Survey of August. The outlook for the United States reflects stronger private consumption and business investment related notably to high productivity growth, whereas the growth impact of the significant fiscal expansion and interest rate cuts gradually diminishes. A pick up in export growth, amplified by the improved cost competitiveness of US enterprises owing to the dollar’s depreciation, also contributes to higher activity growth in the forecast period. In 2005 the growth rate is forecast at 3.3 per cent.

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