Economic Survey 2007

The global economy remained broad-based in 2006 with a growth estimated at 5.1 per cent. Growth was particularly strong in the United States, the Euro area and Japan. Continued rapid expansion in China had a positive impact on other Asian countries due to the high demand for goods in the country. The low income countries’ growths were largely boosted by the strong commodity prices though the oil importing countries were affected by the high oil prices. Africa’s economic performance remained impressive, maintaining the 2005 growth of 5.4 per cent. This was particularly attributed to the rise in global demand for commodities and the rise in revenue in the oil exporting countries. World trade volumes expanded by 9.6 per cent in 2006 compared to 7.7 per cent growth in 2005 reflecting a solid growth in the world economy. 1.2. Headline inflation in many of the major advanced economies such as United States, Japan and Euro area has been above the targets, pushed up by rising oil prices, high rates of growth and large exchange rate depreciations in some emerging markets such as South Africa, Turkey and Venezuela. The headline inflation in the advanced economies was estimated to have increased to an average of 2.2 per cent in 2006.