- Activity has strengthened in the major overseas industrial economies: growth has quickened in the United States, but only a slow and hesitant recovery seel1'ls to be under way in Europe.
- Output in the major six economies is projected to have grown by 1,1/4% last year, and to grow by 1,1/2% - 2% in 1994. Recovery in Europe is likely to be dampened by a lack of confidence and continued labour shedding. In Japan, corporate debt remains high and likely to inhibit recovery.
- High and rising unemployment has prompted debate in the European Union about a number of policy prescriptions, including labour market deregulation.
- The successful conclusion to the GATT Uruguay Round will raise world output and reduce world inflation in the long term as well as strengthen the multilateral trading system (see the box on the Uruguay Round and financial services).
- Inflationary pressures remain weak in the major countries; producer prices are particularly subdued. Despite recent rises in non-oil commodity prices, there is no sign of a change in longer-term trends, while oil prices have weakened further (see the box on recent trends in commodity prices).
- The easing of short-term interest rates in Cernwny, France and other European economies has mostly been accompanied by further falls in long rates.
Published on
01 March 1994
The international environment