National economic forecasts 1988-89

Abstract

MIER has begun a new cycle of forecasts for the Malaysian economy for the period 1988-1989. Recent events, in particular the "crash" in equity prices in the world's stock markets, and the consequent problems in the global financial markets point to deflationary trend in the US economy, unless a Congressional budget compromise is reached and the Louvre Accord Summit Group is successfully embellished. But even if the US can avert a recession, world economic growth will be slowed down as a result of of attempts to cut the US budget and trade deficits. Economists currently meeting in Paris to prepare for the half yearly outlook forecasts of the OECD are already indicating a revision of earlier growth rate forecasts in the industrialized world to 2 per cent in 1988, well down from the around 2.75 per With the country's recent recovery cent expected this year achieved mainly because of the strength of commodity and manufactured exports, such a slowdown in the world economy would have considerable influence on our growth prospects.