GROWTH DROPS

Press, Volume CIII, Issue 30540, 8 September 1964, Page 15

GROWTH DROPS

(N.Z.P. A.-Reuter—Copyright) TOKYO, Sept. 7. Indications are that the rate of economic growth in Britain will be lower in 1964 than in 1963, Mr PierrePaul Schweitzer, man-aging-director of the International Monetary Fund, told the fund’s general meeting in Tokyo today. In a survey of the world economic situation, Mr Schweitzer said measures in which balance -of - payments considerations have played a prominent part have recently moderated the economic expansion of both Britain and Japan. He said that in Britain, moderating policies adopted earlier this year appear to have lowered the increase in demand to an annual rate of 4 per cent, “which is more in line with what the authorities consider sustainable over the longer run.” Mr Schweitzer said that cost increases in a number of Continental European countries, as well as a slow-down in the rate of increase in industrial production, have continued to give some cause for concern. Wage Negotiations “It is understandable that the authorities must continue to pay considerable attention to restraining pressures on prices.” he said. “In several countries, Success in containing these pressures may hinge on wage negotiations later this year.” Mr Schweitzer stressed the need for co-ordination of monetary policies throughout the world and urged surplus, as well as deficit, countries to pay attenton to the external impact of their financial policies. Interest Disparity “At present the restrictive monetary policies in Europe, in combination with them or liberal monetary policies in the United States, as evidenced by a growing disparity in interest rates between the two areas, carry with them dangers of their own,” he said. In urging greater coordination of monetary policies among major countries, Mr Schweitzer called on the authorities to give more weight to fiscal policies, and rely less on monetary policies in regulating domestic demand.