Economic Growth Expected To Accelerate Global Economy Estimated To Grow 3.8 Percent This Year

The global economy this year and next will keep expanding, though world trade will slow from its unusually rapid growth of the past two years, the International Monetary Fund forecast last week.

The IMF, in its latest world economic outlook report, estimated the global economy will grow this year by 3.8 percent and next year by 4.3 percent. In 1995, the growth rate was 3.5 percent.

Since 1992, the world economy has been posting an almost uninterrupted series of year-to-year gains. If the IMF forecast is on target, that trend will persist at least two more years. Next year’s projected growth would be the highest since 1988.

This year’s estimated gains, the IMF said, reflect a pickup in economic activity in Japan, Latin America, Africa and the former Soviet Union, though Asia - its growth rate estimated at 8.2 percent - would remain the world’s fastest growth region.

U.S. economic growth this year is put at 1.8 percent, compared with 2 percent in 1995 but will accelerate next year to 2.2 percent, according to the IMF. A similar outlook is given the 15-nation European Union, which next year may grow by as much as 2.7 percent.

Japan, the IMF said, will stage the sharpest gains among the major industrial nations. Its growth rate, less than 1 percent last year, is expected to reach 2.7 percent this year and 3.1 percent in 1997.

Meanwhile, the IMF said, global inflation is steadily falling. It is expected to keep averaging 2.4 percent in the industrial nations, but will decline both this year and next in most of the rest of the world, the IMF said.

World trade, however, will cool down from the unusually big gains of 1994-95, when it averaged nearly 9 percent annual growth. This year, the IMF foresees 6.4 percent growth and next year 7 percent.