Key themes from recent Annual Economic Reports

This page gives a thematic overview of Annual Economic Reports in recent years.

2023: A tale of three journeys

The 2023 Annual Economic Report explores the global economy's journey and the policy challenges involved. It is, in fact, an exploration of not one but three interwoven journeys: the journey that has taken the global economy to the current juncture; the journey that may lie ahead; and, in the background, the journey that the financial system could make as digitalisation opens up new vistas. More...
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2022: No respite

There is no respite for the global economy. Two years ago, it was shaken by the onset of the pandemic, as an overwhelming health crisis turned into an overwhelming economic crisis. While the after-tremors of the pandemic still reverberate, two new shocks hit home in the year under review: the unexpected resurgence of inflation and the tragic war in Ukraine. More...
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2021: A bumpy pandexit

It is now over a year since the Covid-19 pandemic struck out of the blue, plunging the global economy into a historically deep recession. An acute health crisis turned into an overwhelming economic crisis, as policymakers adopted stringent containment measures to save lives. This was a recession in response to an insidious invisible enemy. More...
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2020: A global sudden stop

The past year has felt like an eternity. It is probably too early to tell, but future economic historians might consider the Covid-19 pandemic a defining moment of the 21st century. When, just over a decade ago, the Great Financial Crisis (GFC) hit the global economy, it was rightly considered such a moment. The pandemic's legacy could be even deeper and longer-lasting. More...
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2019: No clear skies yet

It was perhaps too good to be true. In 2017, it was unusual to see a synchronised global expansion at rates above estimates of potential so late in the upswing and, moreover, to project it to continue well into the future. Some deceleration was on the cards. But when it came, in the second half of 2018, it appeared much stronger than expected. It caused tremors in financial markets and anxiety about a possible impending recession. Faced with the prospect of a weaker economy and with an abrupt tightening of financial conditions, the major central banks put the very gradual monetary policy tightening on pause. The recession has not materialised. Still, as always, the question everyone is asking is: "What next?" More...
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2018: A stronger expansion: how to make it last

Coming off a vintage year for global growth, prospects look favourable. But there are material risks ahead. These largely reflect the unbalanced nature of the recovery, with central banks bearing most of the burden. Financial markets are overstretched and debt has grown further globally. Policymakers should use the current window of opportunity to rebalance the policy mix and lay the basis for a more sustainable expansion, while paying more attention to the long term. More...
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2017: Towards resilient growth

What a difference a year can make in the global economy, in terms of both facts and, above all, sentiment. The facts paint a brighter picture. There are clear signs that growth has gathered momentum. Economic slack in the major economies has diminished further; indeed, in some of them unemployment rates have fallen back to levels consistent with full employment. More...
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2016: When the future becomes today

The global expansion continues. But the economy still conveys a sense of uneven and unfinished adjustment. Expectations have not been met, confidence has not been restored, and huge swings in exchange rates and commodity prices in the past year hint at the need for a fundamental realignment. How far removed are we from a robust and sustainable global expansion? More...
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2015: Is the unthinkable becoming routine?

Globally, interest rates have been extraordinarily low for an exceptionally long time, in nominal and inflation-adjusted terms, against any benchmark. Such low rates are the most remarkable symptom of a broader malaise in the global economy: the economic expansion is unbalanced, debt burdens and financial risks are still too high, productivity growth too low, and the room for manoeuvre in macroeconomic policy too limited. The unthinkable risks becoming routine and being perceived as the new normal. More...
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2014: In search of a new compass

The global economy has shown encouraging signs over the past year. But its malaise persists, as the legacy of the Great Financial Crisis and the forces that led up to it remain unresolved. To overcome that legacy, policy needs to go beyond its traditional focus on the business cycle. It also needs to address the longer-term build-up and run-off of macroeconomic risks that characterise the financial cycle and to shift away from debt as the main engine of growth. Restoring sustainable growth will require targeted policies in all major economies, whether or not they were hit by the crisis. More...
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2013: Making the most of borrowed time

Originally forged to describe central banks' actions to prevent financial collapse, "whatever it takes" has become a rallying cry for them to continue their extraordinary policies. But we are past the height of the crisis, and the goal of policy today is to return to strong and sustainable growth. Authorities need to hasten structural reforms so that economic resources can more easily be used in the most productive manner. Households and firms have to complete the repair of their balance sheets. Governments must redouble their efforts to ensure the sustainability of their finances. More...
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2012: Breaking the vicious cycles

The global economy has yet to overcome the legacies of the financial crisis to achieve balanced, self-sustaining growth. In different ways, vicious cycles are hindering the transition for both the advanced and emerging market economies. After reviewing the past year's economic developments (Chapter II), the economic chapters address fundamental aspects of these vicious cycles: unfinished structural adjustments (Chapter III), risks in the current stances of monetary (Chapter IV) and fiscal policy (Chapter V), and ... More...
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2011: Building a stable future

Over the past year, the global economy has continued to improve. In emerging markets, growth has been strong, and advanced economies have been moving towards a self-sustaining recovery. But it would be a mistake for policymakers to relax. From our vantage point, numerous legacies and lessons of the financial crisis require attention. In many advanced economies, high debt levels still burden households as well as financial and non-financial institutions, and the consolidation of fiscal accounts has barely started. International financial imbalances are re-emerging. More...
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2010: Beyond the rescue: exiting intensive care and finishing the reforms

The financial crisis has left policymakers with a daunting legacy, especially in industrial countries. In setting policies, they must adopt a medium- to longterm perspective while they cope with the still fragile and uneven recovery. Households have only just begun to reduce their indebtedness and therefore continue to curb spending. Extraordinary support measures helped to contain contagion across markets, preventing the worst. But some measures have delayed the needed adjustments in the real economy and financial sector, where the reduction of leverage and balance sheet repair are far from complete. More...
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2009: Rescue, recovery, reform

The 2008/09 Annual Report from the Bank for International Settlements reflects on the dramatic events affecting the world's financial system and economy over the preceding two years. The essential and complex system of finance has been critically damaged; trust has been lost. There were both macroeconomic and microeconomic causes of the collapse. The former included imbalances in international claims and a long period of low real interest rates, while the latter consisted of problems with incentives, risk measurement and regulation. More...
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2008: The unsustainable has run its course

After a number of years of strong global growth, low inflation and stable financial markets, the situation deteriorated rapidly in the period under review. Most notable was the onset of turmoil in the US market for subprime mortgages, which rapidly affected many other financial markets and eventually called into question the adequacy of capital at a number of large US and European banks. At the same time, US growth slowed markedly, reflecting setbacks in the housing market, while global inflation rose significantly under the particular influence of higher commodity prices. More...
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2007: Piecing the puzzle together

The favourable global economic performance seen in recent years extended into the period under review. Global growth was strong and there were even welcome signs of better balanced demand. The US economy slowed somewhat, largely due to a weaker housing sector, while domestic demand in Europe, Japan and a number of emerging market economies picked up. Although output in many countries seemed to be close to potential, and commodity prices rose still further, overall inflation pressures remained muted. More...
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2006: Resilience to mounting strains

Global growth last year was again very rapid, in spite of higher prices for energy and other commodities. Moreover, core inflation generally stayed low even as headline inflation rose. Yet, as the year wore on, fears began to grow about prospective inflationary pressures. Concerns also began to mount about the growing imbalances in the global economy, not least the low saving and high investment levels in the United States and China, respectively, and record current account imbalances. More...
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2005: So far, so good

Looking back over the past two decades, several global economic trends can be identified. Lower and less volatile inflation, accompanied by higher and less volatile output growth, were welcome features. Less welcome were growing external and internal imbalances, the latter leading to more frequent periods of financial stress often associated with rapid increases in credit, asset prices and fixed investment. More...
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2004: Time to rebalance?

The global slowdown earlier this decade was met with unusually strong fiscal and monetary stimulus in the industrial countries, especially in the United States. Policy was also eased in many emerging market economies, often in association with attempts to prevent the appreciation of their currencies against the US dollar. Higher asset prices and more favourable conditions in global financial markets, for much of the period under review, amplified the effects of policy easing and contributed to global economic growth that was much stronger than expected earlier. More...
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2003: An uncomfortable soft spot

The last year or so has been marked by economic disappointments. Interrelated developments in the geopolitical, economic and financial spheres held back growth and led to great uncertainty about the future. The recovery in the world economy seemed to stall. Indeed, the news got worse rather than better during most of the period under review. This was surprising to many given the high degree of policy stimulus being applied in large parts of the world. More...
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