DOLLAR DEFICIT REMAINS BRITAIN'S CRUCIAL PROBLEM

Bay of Plenty Times, Volume LXXVII, Issue 14928, 16 March 1949, Page 3

DOLLAR DEFICIT REMAINS BRITAIN'S CRUCIAL PROBLEM

Balance In Trade With Oilier Countries Achieved Last Year

EXPORTS TO NORTH AMERICA MUST BE

FURTHER INCREASED

London, March 15

Though Great Britain's dollar problem persists, the long: standing' deficit in her overall foreign trade turned unexpectedly into a small surplus at the end of last year. This is shown today in the annual White Paper on British economic prospects the economic survey for 1949.

It shows that exports are likely to remain roughly in balance at least until half-way through the. present year.' But there is an important point to be noted in this achievement. The total balance of Britain's external trade contains a dollar deficit which will still be running at an estimated rate of £115.000,U00 on current accounts in June. Although therefore Great Britain is paving her way in some markets, she is still far 'from doing so in those of the Western Hemisphere, particularly in the United States and Canda. This dollar deficit remains the crucial problem. Although it is steadily diminishing it is likely to persist. While it does so Britain cannot be independent of gifts and loans from the United States and Canada. It must now concentrate on increasing exports to North American markets.

The White Paper describes this as the most important single aim of Britain's economic policy this year. Three other main aims are set out:

Britain must expand her home production, costs must be reduced, and the country must go on fighting inflation.

Production targets for the basic industries are again raised. Coal output for 1949 is estimated at between £215,000,000 and £220,000,000. It is hoped that steel output may go 500,000 tons above 1948's record Tevel of about 15,000,000 tons. A further expansion is called for, too, in textiles.

As part of the British drive to wipe out the dollar deficit, the White Paper says Britain must increase the dollar surplus owned by the Colonies. It also states that special attention will be paid during 1949 to the requirements of the Colonial Empire.

A count must be taken not only of the contributions, which the Colonial Empire can make and is making to the economy of the United Kingdom, but of the responsibilities of the United Kingdom to the colonies.