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Macroeconomic Outlook

National Economic Recovery Plan
Chapter 2

Contents





World Economic Prospects


There are some grounds for optimism among the industrial countries although developments have been mixed and cyclical positions differ widely. On average they are expected to experience moderate output growth around 2.1 percent per annum in 1998 (
Table 4). Long-term interest rates have come down significantly with inflation remaining generally subdued.

Growth in the United States and the United Kingdom has remained stronger than expected, while the economic performance in Denmark, Ireland, and the Netherlands are expected to be favourable. Despite promising signs of recovery during the last two years, Japan's recovery has faltered and, according to OECD's estimates, it will record - 0.3 per cent economic growth because of problems in the financial system and continued fragility in business and consumer confidence.

Table 4: Selected Economies: Real GDP and Consumer Prices (Annual percent change)

 

Real GDP

Consumer Prices1

1996

1997

1998

1996

1997

1998

Total OECD

2.8

3.1

2.4

2.3

2.1

2.1

Major industrial countries

2.5

2.8

2.1

2.2

2.1

1.7

United States

2.8

3.8

2.7

2.9

2.3

2.0

Japan

3.9

0.9

-0.3

0.1

1.7

0.9

Germany

1.4

2.2

2.7

1.5

1.8

1.6

France

1.5

2.4

2.9

2.0

1.2

1.4

Italy

0.7

1.5

2.4

3.8

1.8

1.8

United Kingdom

2.2

3.3

1.7

2.4

3.1

2.9

Canada

1.2

3.8

3.3

1.6

1.6

1.5

Other OECD

4.0

4.3

3.4

3.2

2.6

3.7

European Union

1.7

2.6

2.7

2.4

1.9

2.0

South Korea

7.1

5.5

-0.8

4.9

4.4

10.5

Taiwan Province of China

5.7

6.0

5.9

3.1

0.9

2.0

Hong Kong SAR

4.9

5.2

0.9

6.0

5.9

4.3

Singapore

7.0

7.5

3.2

1.4

2.2

2.5



Asia2

8.3

6.7

4.4

6.7

3.9

8.0

China3

9.7

8.8

7.2

6.1

0.8

1.2

Indonesia

8.0

4.7

-8.5

7.9

11.1

35.0

Malaysia

8.2

7.8

1.4

3.5

2.7

7.5

Philippines

5.5

5.1

1.8

8.5

5.0

10.2

Thailand

6.7

-0.4

-3.5

5.8

6.0

12.0

Vietnam2

9.3

7.5

5.0

5.7

3.1

7.0


Source : IMF, World Economic Outlook, May 1998

OECD Economic Outlook, June 1998

Note:
1 Consumer prices in 1998 for OECD economies are sourced from IMF
2 IMF
3 GNP



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