Section I. Recent economic developments

Global demand has risen significantly this year, with GDP growth projected to have accelerated to 4¾ per cent per annum (on a purchasing power parity basis) from 3½ per cent per annum last year and 2½ per cent in 1998. This will be the fastest rate of global growth seen since 1984. These peaks in the rate of global economic expansion coincide with those for growth in the United States, indicating the extent to which the world economy depends on the health of the American economy. Virtually all economies are likely to enjoy faster growth this year than in 1999, as indicated by Chart 1. Output growth in the OECD is projected to have accelerated from 3 per cent last year to between 4¼-4½ per cent this year. Growth in the non-OECD countries is projected to have accelerated from 3¾ per cent last year to between 5-5¼ per cent this year. The growth of world merchandise trade volumes is estimated to be over 12 per cent this year, more than twice the rate seen in 1998 and 1999.