The 1986 World Economy, The 1987 National Economy Through May, And Performance Of The U.S. Nonfuel Mineral Industry - World Economy In 1986

Recent data indicate a marginal decline in overall growth in world economic output from 3.1% in 1985 to 2.9% in 1986 (table 1),2, 3 Many nations experienced slower economic growth because of the huge trade imbalances existing between the United [ ] States and Japan and the Federal Republic of Germany, the U.S. budget deficit, and the growing Third World debt. Some developing nations, however, experienced booming growth. Declining prices for energy and nonenergy commodities and the fall of the dollar against the currencies of major industrial countries benefited several developing countries--energy importers and exporters of manufactured goods with currencies tied to the U.S. dollar, which were able to expand markets in the industrialized nations. The drop in commodity prices increased demand in industrial countries and depressed it in developing countries. Lower demand in the developing countries contributed to a decline in the real net exports from industrial countries. As a result, output growth in industrial countries declined from 3.0% in 1985 to 2.4% in 1986, despite growing internal demand, Average output growth of developing countries increased from 3.296 to 3.596 during the same period, however, primarily because of the low prices of their products and the strength of demand in industrial countries for those products. Developed country output growth was extremely uneven, however. For example, the economic output of nonfuel exporters grew 5.4% in 1986, while that of fuel exporters dropped 0.7%.