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Slowdown in Global Economic Momentum – Asia and the USA To Remain Growth Drivers of World Economy in 2005

Johann Elsinger (), Gerhard Fenz (), Ingrid Haar-Stöhr (), Antje Hildebrandt (), Thomas Reininger () and Gerhard Reitschuler ()
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Johann Elsinger: Oesterreichische Nationalbank
Gerhard Fenz: Oesterreichische Nationalbank, Economic Analysis Divison,
Ingrid Haar-Stöhr: Oesterreichische Nationalbank
Antje Hildebrandt: Oesterreichische Nationalbank, Foreign Research Division,
Thomas Reininger: Oesterreichische Nationalbank, Foreign Research Division,

Authors registered in the RePEc Author Service: Andreas Wagener

Monetary Policy & the Economy, 2005, issue 1, 6–22

Abstract: In 2004, despite the sudden jump in oil prices and the ballooning trade deficit, the U.S. economy grew by 4.4%, or more robustly than ever since 1999. In the same year, growth in consumer prices peaked at 3.3% — the highest level in four years. In early February 2005, the U.S. Fed raised its key interest rates by 25 basis points for the sixth time since mid-2004. Whereas Japan slipped back into a period of recession, other Asian economies continued growing apace in 2004. The second half of the year 2004 saw a slowdown in GDP growth momentum in the euro area. Despite positive stimuli from investments, growth rates declined, due to weaker net exports and still very subdued private consumption demand. Consumer restraint can partly be explained by the sluggish growth in real disposable income as a result of higher energy prices, which are also responsible for the rise in inflation. In the first three quarters of 2004, most new Central European EU Member States expanded at a faster pace than in 2003 as a whole. The upward pressure on prices (partly induced by EU accession) was very strong in the new Member States in 2004. In Romania, an EU candidate country, growth rocketed to an outstanding 10.0% in the third quarter. Following weak growth in the fourth quarter of 2004, Austria's economy is regaining steam, but is not immune to the current slowdown in growth in the euro area as a whole. The OeNB's short-term indicator forecasts 0.4% seasonally adjusted growth in Austria's real GDP for the first and 0.5% for the second quarter of 2005 (each compared with the previous quarter).

Keywords: Economic; growth (search for similar items in EconPapers)
Date: 2005
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