WORLD ECONOMY GROWS AT ONLY 1 PERCENT IN '91, IMF SAYS
World economic growth this year will reach a nine-year low of 1 percent, but a moderate rebound in 1992 promises to bring the growth rate up to 2.75 percent, according to the International Monetary Fund.The World Economic Outlook report, released prior to the IMF's annual meeting this week in Bangkok, notes several positive signs: a decline in oil prices, the end of uncertainties associated with the Gulf war, and falling interest rates in some countries. Growth in the industrial countries is expected to slow from 2.5 percent in 1990 to 1.25 percent in 1991 before picking up to an average 2.75 percent in 1992. Output in the developing countries is likely to decline by 0.5 percent this year, despite continued strong growth in Asia. Most of the decline is due to the contraction of economies in Eastern Europe, the Soviet Union, and the Middle East. Developing countries, except those in Eastern Europe and the Soviet Union, are expected to grow by almost 5 percent in 1992. In the Soviet Union, output is expected to fall further due to the slow pace economic reforms. Inflation is projected to decline from 5 percent in 1990 to 4.5 percent in 1991 and 3.75 percent in 1992. Interest rates have generally tended to fall in 1991 because of a weak global economy and easier monetary policies in some countries. Failure to conclude the Uruguay Round of world trade talks on schedule has been a major setback for the world economy, the report says. Market access continues to be limited in many countries, particularly harming many developing countries and nations that have abandoned central planning and liberalized their trade systems unilaterally.