| Abstract: | The world recovery, which began at the turn of the year, gathered pace in the second quarter. We have again revked our forecast upwards and predict an increase of 2 1/2 per cent in OECD GNP in 1983 and a further 3 1/2 per cent in 1984. In its early stages the recovery was centred upon North America, though more recently it has spread to West Germany and Japan. France and Italy, however, remain in recession. Over the next 12 months this pattern is unlikely to change significantly-in the approach to the Presidential election the US is expected to grow quite rapidly, but domestic demand will remain a restraining factor in Europe/Japan where, by historical standards, modest growth is expected. Reflecting this some inflationary pressure could re emerge in the United States towards the end of next year, though not, in this forecast, elsewhere. We continue to expect therefore that world inflation will settle in the 6–7 per cent range and that this will enable the world recovery to be sustained over the medium term. |
