Abstract

This year marks the fourth consecutive year of sub-par growth performance for the world economy, and indications of a resumption of stronger growth in 1994 are still tentative (Chart 1). The uncertainty characterizing the short-term prospects is underscored by a further markdown of the output projections for most industrial countries since the May 1993 World Economic Outlook. In Japan, recent indicators suggest that the recovery stalled in the spring; recovery in continental western Europe appears unlikely to begin until late this year or early in 1994; and in North America the expansions are somewhat weaker than expected. Several central European countries appear to have started the process of recovery, but high inflation and excessive budget deficits threaten to prolong the crisis in most countries of the former Soviet Union. Strong growth in many developing countries remains the most positive feature of the global situation, but excess demand pressures in several countries are of concern, as is the continued plight of many of the poorest countries, especially in Africa.