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Chapter II. The World Economy

Published online by Cambridge University Press:  26 March 2020

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The world economic position and prospects have worsened further in the last three months. In the United States and Japan, in particular, recessionary conditions are proving to be more marked and more prolonged than we had expected, and it looks as though by the end of the year all the major industrial countries, with the possible exception of France, will have experienced at least one quarter in which output has fallen or at best shown no appreciable rise. The other developed countries have fared better, but we no longer expect there to be any growth of output in the OECD area either in the second half of the year or in the year as a whole. In 1975 the position should be rather better, at least by the second half. We expect OECD countries' aggregate GNP to grow by about 2 per cent year-on-year and nearly 3 per cent between the fourth quarters of 1974 and 1975.

Type
Articles
Information
National Institute Economic Review , Volume 70 , November 1974 , pp. 23 - 37
Copyright
Copyright © 1974 National Institute of Economic and Social Research

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References

page 31 note (1) Unless otherwise indicated prices throughout the world trade and payments section are given in terms of ‘new’ SDRs (that is a weighted average of currency values, see National Institute Economic Review, No. 69, August 1974, page 45).

page 32 note (1) The course of world trade in the first half of 1974 remains very unclear. According to UN statistics, in the first quarter the volume of world imports was 5½ per cent higher than in the first quarter of 1973 while that of exports had risen nearly 10 per cent. Data so far available on the second quarter seem to point to somewhat similar relationships with the second quarter of 1973. The discrepancy between the two series first appeared in 1973 II, and has increased in each quarter since then. Under recent conditions of a static or declining level of output the import statistics seem the more plausible and have therefore been given the greater weight in our forecasts of world trade, even though this is conventionally measured from the export side.

page 35 note (1) See footnote (1) on page 32. The recorded increase in world exports would probably be bigger, at least in 1974.