Recession in Europe to be Overcome in 1994

Economic recovery in the OECD area is being delayed. In the U. S. the upturn has lost momentum early this year, in Western Europe it is not to be expected before 1994. The reduction of private sector indebtedness and lower interest rates will gradually improve the business climate. With the exception of Japan, high budget deficits prevent fiscal stimulation. GDP growth in OECD countries will remain below 1½ percent in 1993 before accelerating modestly to 2¾ percent in 1994. The Western European economies should recover from stagnation and expand by 2 percent next year. Unemployment in industrialised countries will increase to 35 million, the rate of inflation should fall below 3 percent.