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Chapter III. The World Economy
Published online by Cambridge University Press: 26 March 2020
Extract
We said last February that 1980 would be a year of slow growth, rapid inflation and massive balance of payments deficit for most of the developed world. OECD countries' industrial production, which actually showed a marginal fall, was even lower than we expected. But their aggregate GDP growth of around 1¼ per cent seems to have been almost exactly in line with our prediction, as does their current balance of payments deficit of a little over $70 billion, while the rise of 13 per cent in their consumer prices was slightly greater than we forecast. The rise in the average price of oil ('of the order of at least 60 per cent' in our forecasts, 68 per cent in actuality) played a major part in these developments.
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- Copyright © 1981 National Institute of Economic and Social Research
References
page 48 note (1) Data which have become available since the chart was prepared show a further rise for Canada in November but falls for France in November and Italy and the United Kingdom in December.
page 48 note (2) Economic Outlook 28, December 1980, pp. 23-4.
page 63 note (1) A recent West German forecast by the Council of Economic Advisers, which gives a $2-3 billion improvement in the current balance in 1981, assumes the same real exchange rate and real oil price in 1981 as in 1980. Our exchange rate forecast (no change from end-December) implies a 7 1/2 per cent fall in the average nominal rate; we expect a 10 per cent rise for the oil price.
page 66 note (1) World Economic Outlook, May 1980, page 87.