The international environment

Quarterly Bulletin 1998 Q2
Published on 01 June 1998

● The financial and economic situation in Asia now appears more stable. Signs of contagion in other emerging markets have diminished.

● Growth in the United States slowed slightly in the final quarter of 1997.

● The Japanese economy has continued to slow, and Japanese output fell slightly.

● The recovery in Germany and France has continued, though growth slowed in Germany. Domestic demand continued to strengthen in France, but not in Germany.

● Equity prices in most major markets have continued to rise. After strengthening in January 1998, Japanese equity prices remained in a narrow range during February and March, but fell slightly in early April.

● Inflation has remained low throughout the major six (M6) overseas economies.

● EU countries have released their fiscal debt and deficit figures for 1997. Based on these, the European Commission and European Monetary Institute recommended that eleven countries were
eligible for membership of monetary union. The European Council decided to admit these countries to monetary union from 1 January 1999.

● Official interest rates have remained unchanged in most industrial countries. Bond yields remained at low levels.

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