Outlook and appraisal [March 1991]

Against the background of a moderate and relatively stable oil price the idea of a 'global recession' seems unduly pessimstic. Growth in Japan and Germany, the main powerhouses of the major industrialised countries (the G7), is
undoubtedly slowing down, largely the result of tightening monetary policy in the wake of increased inflationary pressure. But outright recession is largely confined to the English speaking world, and especially to the United States and the UK (see World Economy section). While this is unpleasant, its effects should not be overstated. Assuming the GATT talks do not end in complete disarray, world trade growth, an important component of economic growth, should be
between 4% and 5% in 1991. This is below the growth rates recorded in 1989 and 1990, but should still ensure modest GDP growth for the G7 countries as a whole, with the prospect of a reasonable recovery in 1992.