Bank forecasts

Press, 13 December 1986, Page 33

Bank forecasts

The latest forecasts from Mr David Kern, chief economist for the National Westminster Bank pic, parent company of the Nat West Group in New Zealand, include: Q The oil price is forecast to strengthen over the next few years, to average SUSI 6 per barrel in 1987 and rise to SUS 22 per barrel by 1991.

© International interest rates are near their low point in the present cycle. In 1987 interest rates are forecast to rise by some 1 per cent to 1.5 per cent in the U.S., while remaining unchanged in West Germany and Japan. © Growth prospects are likely to improve over the next year in most major economies. ® The U.S. dollar will remain vulnerable due to the adverse influence of America’s large external deficit. O U.K. real GDP is expected to increase by 3 per cent in 1987, however growth is expected to slow down in 1988. This is in reaction to tighter economic measures aimed at restraining consumer spending and improving the trade position. ® Sterling could follow an erratic path over the coming year if oil prices are volatile and pre-elec-tion uncertainties recur. © Over the longer term the yen is expected to show a modest, but steady rise owing to the continuance of Japan's large trade surplus.