The economic background [December 1998]

Low, Kenneth and Ashcroft, Brian and Swales, Kim (1998) The economic background [December 1998]. Quarterly Economic Commentary, 24 (1). pp. 1-6. ISSN 0306-7866

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The global economy has been dominated by a series of adverse financial shocks recently. This includes the continuing problems in the Far East, a debt moratorium in Russia as well as fears of contagion in Latin America. There is the possibility of further shocks with adverse effects on financial markets that could lead to a global recession. It is more probable however that 1999 will see a considerable slowdown in economic activity. The IMF has forecast that it will grow by 3.7% in 1998, a considerable contraction compared to 1997 before rising to 4.6% in 1999.