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Growth in World Economic Output Slows
The world’s total output of goods and services, known as the gross world product (GWP), rose by 5.4 percent in 2008, to $69 trillion.1 (See Figure 1.) The rate of growth, a deceleration from the heated 7.5 percent annual average of the previous five years, was dampened by the global recession that emerged during the year.2 (See Figure 2.) The data are calculated based on the purchasing power parity exchange rate, which converts national output to a common currency that reflects equivalent purchasing power across countries.3
Growth was highly uneven around the world, with the greatest advances in developing economies and the least in the largely mature industrialized economies.4 (See Table 1.) The highest rates of growth were recorded for developing Asian nations, which includes the rapidly expanding economies of India and China. At 7.6 percent, the growth in this region was more than 12 times the average rate in industrial countries.5 It is projected to slow only slightly, to 6.2 percent, in 2009, in part because of adoption of very large stimulus packages, particularly in South Korea and China.6
The world’s least developed economies—a United Nations designation for 50 countries characterized by low income, by low levels of nutrition, health, and literacy, and by economic vulnerability—also showed strong growth in 2008.7 Sub-Saharan Africa, for example, saw a growth rate of 5.5 percent in 2008.8 But the road ahead for the poorest nations is projected to be rocky: the International Monetary Fund (IMF) expects sub-Saharan Africa to grow by only 1.3 percent in 2009.9 The least developed economies often lack diversity of economic activity, and they are strongly dependent on exports of commodities, whose prices can be volatile. Both factors make these countries vulnerable to economic disruption in a global economic downturn.10
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