Growth of the World Economy Weakens

In the period from 1991 to 1995 U. S. interest rates and the value of the dollar are expected to stabilize at the lowest level recorded over the last 25 years; prices of crude oil will exceed the average level of 1985 to 1990 by some 50 percent, but the rise in prices of other raw materials will be rather subdued. Given these price developments, world trade is forecast to increase at the annual rate of 6.0 percent until 1995, world GDP will grow at a rate of 2.7 percent. While economic activity in the European industrial countries is likely to expand by 3.0 percent annually (the rate achieved between 1985 and 1990), economic growth in the U. S. will slow down markedly (to 2.1 percent). In the former (Eastern European) planned economies output will shrink significantly during the transition period.