Economic Survey 1986

Available indicators for 1986 show that the O.E.C.D. economies will further strengthen their recovery. The growth rates for the O.E.C.D. countries as a group in 1986 should not be very different from those experienced in 1985. Inflation has already come down to low levels and has stabilised. Unemployment seems set to remain a problem in the longer term, apparently as a result of structural changes in industrial production. After rising to record levels, the value of the dollar has now depreciated and provided this holds, it should have beneficial effects on the world currency markets. Interest rates have continued to be disturbingly high. The reduction in oil prices, coupled with the related savings in production costs of export items, can be expected to ease the task many developing countries now face in controlling deficits. This eventuality should encourage world trade even though the impact may be felt only towards the end of the year and in 1987.