Slower growth, says O.E.C.D.

Press, 29 July 1976, Page 8

Slower growth, says O.E.C.D.

NZPA-Reuter Paris Economic expansion in the non-Communist industrialised countries will continue next year at a slightly slower rate than before, the secretariat of the Organisation for Economic Co-operation and Development has predicted. But in its semi-annual review of the economies of the 24 O.E.C.D. countries, the secretariat issued a warning against any action that could unleash a new spiral of uncontrollable inflation. “Moderation is essential to avoid a new burst of inflation on top of a price rise that is already high, and to ensure that economic growth is sustained over the medium term,” the report said. “The achievement of steady growth, combining progessive declines in both unemployment and inflation rates, depends on the ability of Governments to maintain

cautious demand-manage-ment policies over the rest of the decade.” The report urged Governments to exercise caution in adopting expansionary policies, and said that the current economic upturn in the O.E.C.D. countries contained a particular danger of spilling into new inflation if it was excessively accelerated. “With careful management, the O.E.C.D. countries could sustain an average annual growth rate of slightly more than five per cent in their Gross National Product until at least 1980,” the report said. At the same time, world trade could expand bv some eight per cent a year. Rapid economic expansion in the United States since mid-1975 had boosted recovery in other O.E.C.D. countries, especially Japan, and raised the over-all growth rate in the first half of this year to six and a half per cent the secretariat reported.