International Economic Outlook

INTERNATIONAL ECONOMIC OUTLOOK By Evangelos Otto Simos, Ph.D. A NEW TECHNOLOGY BOOM SPURS GLOBAL GROWTH I. Global Assessment and Outlook Evidence from high frequency data and forward-looking economic indicators suggest that growth in the world economy has remained robust despite higher energy prices. Last September, in our global outlook we assessed that the oil-priceshock would not derail global economic activity and that oil prices will drop to the low fifties by the end of the year and continue falling to the mid forties in 2006. Leading indicators, consumer confidence indices, surveys on business executives attitudes and purchasing managers assessments from all over the world have been more positive than expected at the end of the year. In addition, the price of oil for Brent fell to $53.5 in November from $66 in early September. Using real GDP from the national accounts on a quarterly basis, the United States economy expanded at an annual growth rate of 4.3 percent in the third quarter of 2005, after advancing by 3.8 percent and 3.3 percent in the first two quarters. The combined output of the member countries of the Euro Area is estimated to have grown at an annual rate ...