Economic prospects for the world 2006

According to the World Economic Situation and Prospects (WESP), the world economy is expected to continue to grow at a rate of 3 per cent during 2006. The United States economy remains the main engine of global economic growth, but the growth of China,
India and a few other large developing economies is becoming increasingly important. On average, developing economies are expected to expand at a rate of 5.6 per cent and the economies in transition at 5.9 per cent, despite the fact that these economies may face larger challenges during 2006. The employment situation worldwide remains unsatisfactory. The slowdown in growth partly explains this. More importantly, though, employment creation is falling short of the increment in labour supply in the majority of countries. Driven by higher oil prices, inflation rates have edged up worldwide. Core inflation rates, which exclude the prices of energy and food, have been more stable, indicating that the pass-through of higher oil prices to overall inflation is limited.