Hard Times
Large industrialised counties are now in a recession. What
are the prospects for economic recovery?
The three most important industrial economies in the world are,
at the moment, facing enormous problems. Germany is struggling
with the cost of reunification and is in recession. Japan is
also experiencing recession and the United States has a large
budget deficit.
Forecasters and analysts face questions about the prospects
of an economic recovery. Here are some of their findings:
The election of a new president
of the United States gave hope to the rest of the world. If the
US recovered, the rest of the world would face a more promising
future. However, analysts now accept that the US will only recover
very slowly.
Consumer and investor confidence is still lacking. Large deficits
and declining short-term interest rates mean that there is little
scope for economic stimulus.
The Japanese economy, after years of trade and budget surpluses,
is in deep recession and the growth rate has slowed down considerably.
German economists have lowered their forecasts for economic growth
this year. The lowering of German interest rates may bring some
relief to other members of the European Exchange Rate Mechanism
(ERM). However, Germany's importance as Europe's largest export
market may decline.
Most forecasters are predicting world growth of only one percent
in 1993. Others predict that it will only be after the completion
of the GATT (General Agreement on Tariffs and Trade) negotiations
that the world economy will improve.
In some parts of the world, there are more positive signs, particularly
in some Latin American countries and in South-East Asia. Another
encouraging point is that analysts do not expect an upsurge in
inflation in 1993.
Analysts says that, as long as the rate of interest stays above
the rate of growth in national income, then the ratio of debt
to income will get worse. Falling interest rates help towards
overcoming this problem. They believe it may take several years
before there is real recovery. However, advances in technology
and the collapse of communism offer hope for the world economy.
Reading for meaning
When you read an article, you can often guess the words you
do not know from the context.
Find words or expressions in the above article which have
the following meanings:
|
