Economic Survey 1985

The major economic indicators from available data point to continued improvement in the world economy in 1985. There has been a steady recovery both in output and the investment in the OECD countries while the fight against inflation is being won. However, there are disturbing factors such as high interest rates, the strength of the American dollar although these may both drift down, and labour market complications which may work in concert against full revival. At the domestic level, the long rains came early and have been widespread and generally adequate. This augurs well for agricultural production, and this coupled with firm export commodity prices should set the stage for growth in agriculture by around 4.5 per cent in real terms. But a careful check will be kept on tea and coffee prices together with potential grain surpluses. Manufacturing too, should perform satisfactorily due to the ample availability of inputs, stable monetary climate as well as benefitting from spin-offs related to the buoyancy in agriculture.