2005 - OPEC

OPEC in the World Economy
In 2005, the world economy grew steadily recovering from the slowdown witnessed in the sec-
ond half of 2004. The first half of 2004 had seen significant growth, in fact, the highest gross
domestic product (GDP) growth since 1976. Global GDP in 2005 grew by 4.7 per cent, just a
little below the 5.2 per cent witnessed in 2004 (see Table 1, page 15). In the leading developed
countries, growth in domestic demand weakened slightly, but strong export growth more than
compensated for this. For the Group of Seven (G7) as a whole, the pattern of year-on-year GDP
growth showed remarkable stability. However, developing countries – including China – were
responsible for the majority of the incremental global GDP growth. In 2005, they accounted for
about 67 per cent of the increment, an increase on the 64 per cent recorded in 2004.
The year marked a shift in economic leadership from the United States (US) to Japan.
Although US growth rates remained high, momentum in domestic demand faltered, especially
in the final quarter following the devastating hurricanes that hit the Gulf of Mexico. In contrast
the Japanese economy accelerated strongly as advancements in personal incomes supported
consumer expenditure and by the end of the year real personal consumption was growing at
above the three per cent level.
In developing countries, Asia in particular, strong growth was recorded in the second half of the
year after an uncertain start. As in 2004, the Chinese economy grew by about ten per cent as
exports and related investment spending benefited from the combination of growing demand
in developed countries and the extension of global supply networks. Rising oil and commodity
prices boosted the export revenues of many economies in Latin America and Africa.
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