Chapter II. The World Economy

Abstract

There was another substantial rise in output in industrial countries between the second and third quarters. But during the third quarter the deceleration of economic growth in the United States became more marked and showed signs of spreading to Canada and Western Europe. Developments have been broadly consistent with our August forecast and we still expect the aggregate national output of the industrial countries to be higher by about 4½ per cent in 1969 than it was in 1968 and to rise by another 3-4 per cent in 1970. It now looks as though we were rather too optimistic about prospects in the United States, where the increase is unlikely to exceed 3 per cent this year and may not reach 2 per cent in 1970. On the other hand growth in Western Europe is still tending to surpass expectations. Despite the Italian strikes it will probably be over 5½ per cent this year; and it may exceed 4½ per cent in 1970.