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Quarterly Economic Monitor
Institute for a Democratic Alternative for Zimbabwe (Idazim)
January 06, 2011

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Global Developments

The global economy remained on a positive growth trajectory during the first half of 2010 despite the outbreak of the European Sovereign debt crisis, which adversely affected a number of economies. According to the World Economic Outlook (WEO) assessment in July 2010, the world economy expanded at an annualised rate of over 5% during the first quarter of 2010. The principal contributing factors included an upsurge in industrial production, with industrial production and trade posting double-digit growth. The advanced countries' growth opportunities marked by employment growth and overall macroeconomic developments confirmed expectations of a robust but steady recovery. Emerging and developing economies also experienced strong growth during the same period. On a year-on year basis, the world growth is now projected to grow by 4.5% in 2010, and 4.25% in 2011.

Financial instability is a key factor militating against gains registered over the twelve-month period of 2009 to 2010. Hence, policy efforts in developed countries should focus on the implementation of fiscal discipline that enhance medium growth prospects such as reforms to entitlement and tax systems. A supportive monetary policy will work to enhance stability. In developing countries, policies targeting structural reforms and greater exchange flexibility rate will help maintain the growth momentum as projected.

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