The world economy [August 1985]

The recovery in the world economy which began in 1982 now appears to be moving out of its fastest growth phase. With the US economy growing more slowly in the first half of 1985 than in the corresponding period of 1984, the previous marked differences in growth rates between the US and the European economies are being eroded. Indeed, a number of European countries look set to achieve faster growth during 1984 than the US. Largely due to slower US growth, world trade is likely to expand this year by around 5J-6S as compared to 9% last year. The Bonn economic summit in May and subsequent policy statements provide no indications that the slackening momentum in the world economy is to be compensated for by reflation elsewhere.