The world economy, weighted down by recession in the United States, will grow by only 1.2 percent this year, the International Monetary Fund predicts.
The report Wednesday by the international lending organization saw growth in the United States this year as only 0.2 percent, rebounding to 2.7 percent in 1992 with the end of the current downturn."The outlook has deteriorated sharply in the countries directly affected by the war in the Middle East and in a number of developing countries that previously received substantial export earnings or workers' remittances from Kuwait or Iraq," the IMF said.
But it saw a change coming.
"With recovery in several major industrial countries expected to begin during the course of 1991, and with growth projected to strengthen in a number of developing countries, the expansion of the world economy would rebound to 3 percent in 1992," it said.
While the differences are small in percentage terms, they refer to trillions of dollars worth of goods and services. A 3 percent increase in the U.S. gross national product would amount to $165 billion in a year.
The IMF's growth forecast for this year is half that from its last outlook issued in October, when it saw total world output growing by 2.4 percent in 1991. At that time, the fund didn't foresee the developing recession in the United States, a country that accounts for one-fourth of the global output.
Growth in the world's output has been slowing since 1988. During the 1980s, average income dropped in many countries of Africa and Latin America, where population increases much faster than the average. Richer industrial countries have done better, with larger output and lower birthrates.
Strong growth in Germany and Japan this year and next will balance the slowdown in the United States, Britain and Canada, the IMF said.
For Japan, it predicted growth of 3.6 percent this year and 3.9 percent in 1991. For what was formerly West Germany, it forecast 2.8 percent growth for 1991 and 1.9 percent for next year.
For the period to 1996, the study saw a rebound from the recession in North America and Britain. Compared with the 1980s, growth is expected to be higher in the first half of the 1990s for Germany, France and Italy, about the same in North America and slightly lower in Japan and Britain.
"The industrial world is divided into two parts: one is in recession, the other is in robust growth," said Jacob Frenkel, the head of the fund's Research Department. "It is this divergence that enables us to be optimistic about avoiding a global recession."