The world economy will still catch a cold when America sneezes, but it won't be as bad as it would have been 5-10 years ago, the Washington Post reports. The International Monetary Fund predicts a 2008 global growth forecast of 4.1%—down from 4.9% last year—largely because of an expectation of a US downturn. The impact could have been far worse, but American economic dominance has been diluted, leaving other economies better able to weather a US recession.
Europe, China, and the oil-rich Gulf states are playing a far bigger role. Five years ago, for instance, 33% of all Chinese exports went to the US; that number is down to 20% now. "Emerging markets are growing and crucial," an analyst notes. Some experts think the world's other economies may even be strong enough to help pull the US out of a slump.