The world economy [December 1991]

This brief article provides an analysis of key world economic trends based on recent data. In the second quarter of 1991 there was a further sharp decline in GDP growth among the leading industrialised countries. Comparing the second quarter of 1991 with the corresponding period last year, average growth in the G7 countries was 0.6%, compared with 1.1% in the year to the first quarter. A sharp decline in GDP growth was recorded in Germany, and the UK continued to perform most poorly among its G7 counterparts. Individual country growth rates were as follows (Q2 1991 on Q2 1990): Canada -1.5%; US -0.9%; Japan 5.0%; France 1.6%; Germany 4.2%; Italy 0.7% (year to March); UK - 3.6%. Despite the continuing slackness in GDP growth, there is some evidence that industrial production in the industrialised countries picked up in the second quarter following a very sluggish first quarter. In the year to July industrial production in the OECD declined by 0.3%, and by 0.5% for the G7 countries. In both cases this is a considerably slower rate of decline than in the year to April. The most striking feature, however, is the virtual stagnation of industrial output in Japan and its rapid slowing in Germany, while most other G7 countries unproved their rate of industrial output. Individual countries as follows (year to July unless otherwise stated): Canada -4.4%; US -2.1% (August); Japan 0.3% (August); France 0.2%; Germany 2.0% (August); Italy - 3.6%; UK -1.8%