Expert predicts inflation fall

Press, 12 January 1981, Page 18

Expert predicts inflation fall

INZPA San Francisco i A prominent American 'bank economist expects the rate of world inflation to (drop by one per cent to 14 per cent this year, and to steadily decline thereafter.

Mr Robert Heller, in a report to the Bank of America, said that the main cause of continuing high inflation is the excessive expansion of The world’s money supply. ■ He said that the growth ‘last vear. estimated at: $2.300,000M, was 10.4 per cent and money supply had more than doubled since 1974. The United States money supply accounted for 18 per; cent 'of all funds immediately transferable, he said. The growth in money supplies “greatly exceeds the potential for world production increases and causes I unabated inflationary pressures,” Mr Heller said. Although last year brought no end to world inflation, “world economic performance indicators also show that imbalances in l

(world trade and financial 'markets are below their 3974 peaks,” he said. , -Nevertheless these in- ] flation rates are unacceptab]ly high. “World leaders urgently need to work toward monetary growth rates more closely matching the growth of world production,” he (said, adding that the world (economic growth rate, reimained sluggish at 1.4 per s ]cent last year. 'j Mr Heller said that global ‘economic growth, since a 'minor rebound to 5.5 per Icent in 1976, had steadily (declined to 3.7 per cent in 11979 and the 1.4 per cent (rate this year. He expected that the world economy would pick up slightly this year with a growth rate of between 2 and 2.5 per cent. The total value of all goods and services produced around the world reached a record level of $10,400,000M last year, of which the United States economy accounted for 24 per cent.