Overview

Last year’s Annual Report was written when the Asian financial crisis was only a year old. There was still considerable concern then about the risk of contagion and deep recession. A year later, the situation is more healthy, although only the complacent would contest the need for policy vigilance. Important challenges remain, and recovery is far from complete. Global GDP growth decelerated sharply from the record expansion in the previous year while trade volume growth was more than halved. For parts of Asia a contraction in output growth also meant that import volume growth turned negative. The economic performance of other regions helped to maintain global output growth at around 2.0 per cent and world export growth at about 4 per cent in 1998. The United States continued a remarkable period of expansion, contributing significantly to the global figure. The European Union grew less, but above the global average.