The economic background [March 1998]

Low, Kenneth and Ashcroft, Brian and Swales, Kim (1998) The economic background [March 1998]. Quarterly Economic Commentary, 23 (2). pp. 1-5. ISSN 0306-7866

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There is moderate to strong growth in the global economy (excluding the Asian crisis) with strong Q3 1997 growth in the US although the Japanese economy is slowing. Both France and Germany are showing signs of a strengthening recovery. There are low stable interest rates and low inflation in the industrialised economies. The Far East has been hit by a currency crisis that is rooted in a weak financial system, overvalued currencies, large levels of foreign borrowing and capital inflows as well as political interference. The crisis has deepened and widened since December 1997 and forecasts of world growth have been revised downwards. The US and Europe are not as severely affected as Japan and others with close trading links with these countries.