The sharp fall in equity markets will dampen economic growth next year: global output is forecast to increase by 3.4 per cent in 2003.

Lower stock market wealth means that the United States will grow by 2.9 per cent next year, 0.6 per cent less than our previous forecast.

The euro area will grow by only 1.2 per cent this year, more slowly than in 2001.

The Japanese economy will shrink by 0.1 per cent this year, a better performance than previously expected. However, output will only grow by 0.7 per cent in 2003.