Recent economic developments and outlook

Abstract

At the global level the growth rate of real GDP declined from 4.2 per cent in 1997 to 2.5 per cent in 1998 (IMF, 1999), with adverse consequences for the economies of the least developed countries (LDCs). This decline is largely underscored by the Asian financial crisis, and the subsequent financial contagion and accompanying economic crisis, not only in Asia but also in Latin America. During 1998 prices of non-oil commodities of interest to LDCs, with the exception of tea, continued their downward trend, and oil prices fell by a third. The slump in the volume of world trade (goods and services) was even more pronounced than the fall in world output. In 1998 recorded growth in world trade collapsed to about a third (3.6 per cent) of the rate of growth in 1997 (9.9 per cent), which is the lowest growth rate since 1985.