The world economy [December 1989]

The seven largest OECD countries showed GDP growth, in real terms, of 0.35% in the second quarter of the year, approximately the same as for the OECD as a whole. France displayed the highest quarterly rise (0.6%), with West German output rising by half of that, and GDP in Japan falling by 0.9% in the second quarter (see Japanese economy below). As this paper reveals, these figures are indicative of the continuing slowdown in growth in the major industrialised countries, although there are still no clear signs of a descent into recession. Inflation remains as much of a threat as recession. In the twelve months to September the average inflation rate in the OECD was 5.0%, with the largest seven countries showing an average for the twelve months of 4.2%; the UK had the highest rate (7.6%) and Japan the lowest (2.6%)