The main uncertainty at present remains the aftermath of the Global Financial Crisis.  Although there is evidence of strengthening recovery, employment growth is lagging, and there are also new risks.  As the widespread stimulation by governments and Central Banks is wound back private demand must strengthen to sustain recovery.  Recent instability originating in some euro-area economies has spread to other euro-area members and sovereign debt markets in other parts of the world.  Overheating in emerging-market economies cannot be ruled out, and even growth in China and India may not be immune to the economic pressures.  This requires close monitoring.

• Many of the major international visitor markets are expected to perform below their long term average in the short term, and for many in recession in 2009 only a relatively slow recovery is expected into 2010-11. 
• The European and North American markets are amongst those with the poorest economic outlook and largest uncertainty.  For countries/airports with a high proportion of these markets in their visitor market mix, this presents as a major negative.

 Economic Outlook: GDP Percent Change Year-on-Year
Projections 2010 Onwards
 

Source: IMF World Economic Outlook April 2010 and July 2010 Update 
 

Exchange rates and differential inflation rates impact upon the price of a country as a destination relative to competing destinations.  They have a significant impact on the mix of residents and overseas visitors amongst international passengers at major airports.

• An appreciating currency, combined with a strengthening economy would be expected to result in an increasing proportion of residents in the international market mix.
• A depreciating currency would be expected to hold back resident overseas travel, while stimulating international visitor arrivals from markets with strong economies.

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