The international environment

• Weighted GNP in the major six economies fell in the fourth quarter of 1990. Cyclical divergences between the major economies seem likely to continue in the short term but are expected to narrow in the second half of the year.
• The US dollar has appreciated sharply since the beginning of March, after reaching all-time lows against the deutschemark; the deutschemark has weakened considerably within the ERM.
• Inflation declined as oil prices softened further, but inflationary pressures remain a concern, particularly in Japan and Germany.

The international environment