International Monetary Fund

Abstract

The annual report of the Executive Directors of the International Monetary Fund for the fiscal year ended April 30, 1960, was transmitted to the Chairman of the Board of Governors on July 8, 1960. In its discussion of the world economy in 1959–1960 the report noted that the year which ended April 30 had been marked by a continual upswing in world industrial activity and an increase in world trade, with industrial production up 10 percent over the recession year of 1958 and the value of world trade increased by 6 percent. During this period of business expansion the leading industrial countries had achieved remarkable success in the delicate task of maintaining a high degree of economic stability, without having to place severe restraint on the forces which helped to sustain the expansion of output and real income. The prices of many industrial materials, especially metals, recovered, but the market for primary products remained weak, and the prices of foodstuffs declined. It became evident that, given the mildness of the postwar recessions, the most pressing problem for primary producing countries was not that of finding compensatory finance in connection with short-run fluctuations in export proceeds, but rather that of establishing a satisfactory long-run trend in the volume and prices of exports and of preventing inflationary pressures from causing imports to expand beyond the available resources of foreign exchange. During the year under consideration the lessening of inflationary pressures and the marked strengthening of the payments structure of the world, along with the increasing supplies of both primary and manufactured products, created a situation in which international competition made itself felt more and more strongly.