‘Hard year ahead for world’

Press, 4 October 1977, Page 3

‘Hard year ahead for world’

NZPA staff correspondent Washington The Prime Minister (Mr Muldoon) said yesterday he was apprehensive about the world’s economy. Speaking in a telephone (interview with the NZPA be|fore leaving New York (yesterday morning for New I Zealand, the Prime Minister I said the opinion of financial and economic leaders was that the world’s economic recovery was faltering. “Next year may not be a good one,” he said. Mr Muldoon said he was disappointed by the attitudes he found in talks in Barbados at the Commonwealth Finance Ministers’ Confer- 1 ence and the 1.M.F.-World Bank meetings in Washington. “I didn’t find sufficient cohesiveness in the views ' and policies of the main industrial countries in the face of what I see as a potentially dangerous situation. “There’s a reluctance to ■ take positive steps to diminish the massive deficits which some countries are absorbing.” Mr Muldoon said his talks , in New York on Friday and Saturday confirmed his views. He said action must be

taken to halt protectionist i trade policies and to increase primary commodity • prices. This, he says, would reverse the situation of huge deficits borne by developing and primary producing nations. Mr Muldoon said that on a more positive note he found during his talks in Barbados and Washington “considerable praise” for New Zealand and its policies. He added this was reflected in the success of New Zealand’s SIOOM loan application on the United States loan market 10 days ago at what he described as a “phenomenally low” interest rate of 7.6 per cent. The Prime Minister said the rate was 20 points lower than for a loan floated a week later by the European Investment Bank. “Our credit rating then is better than for the European Bank which has the support of the European Community,” Mr Muldoon said. The New Zealand loan he said, the first on the American market in 10 years, was “very popular” and sold well. He said New Zealand!

would not be back for more money there immediately, but it would make further issues in the future.

“The financial community here has been very supportive, and that augurs well for our ability to finance our deficits.

“Our house is in order, but at this stage my overriding feeling is that the world is going to go through a very difficult time.” Mr Muldoon left Newark Airport, New Jersey, yesterday morning for the west coast and Honolulu, where he will link up with a flight to New Zealand. He is due home this morning.