... fiscal and accommodative monetary policy, mainly in East and Southeast Asia, contributed to strengthening aggregate demand particularly consumption while somewhat firmer external markets provided a boost to industrial production. Prospects for 2003 are clouded by economic weaknesses in the industrial countries and uncertainties relating to the conflict in Iraq and the recent outbreak of severe acute respiratory syndrome (SARS) in Asia. As a result, forecasts have all been adjusted downward in early 2003. In industrial countries, growth divergences between the US, euro area, and Japan will remain significant, with growth in the US at around the 2002 outcome, and weak GDP growth in the euro area and Japan. In developing Asia, aggregate growth projections have been reduced from those at the end of 2002. In most DMCs, domestic demand will remain robust and exports will continue to expand. Macroeconomic policies will generally remain supportive, although both fiscal and monetary policy will need ...

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