World Economic Outlook: Current Situation and Prospects
Author:
International Monetary Fund. Research Dept.
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Abstract

There have been increasing signs of hesitancy in the pace of world economic expansion in the first half of 1985. In the United States, output growth declined to an average of 1 percent (at an annual rate) in the first two quarters of the year from 5.7 percent during 1984, and in other industrial countries the pace of recovery was also generally subdued. Commodity prices fell significantly, thus weakening growth prospects in many developing countries. These developments have not led to major revisions in the projections for industrial countries for the remainder of 1985 and 1986, in part because some of the factors affecting economic performance in the first half of 1985 are expected to be temporary. In the developing world, however, growth in 1985 and 1986 is now expected to be somewhat less than was foreseen six months ago. Moreover, the recent weakness of economic activity serves to underscore the downside risks in the staffs projections and to focus attention on the policy issues that would arise if growth were to slow more significantly.

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