UNITED NATIONS, Jan. 11, Reuter: The United Nations forecast on Monday that the international financial system would remain in a precarious state during 1988 and urged concerted action to avert a world recession.
In a gloomy assessment of world output and trade in the coming year, it is said. “Under such conditions, the International Financial System will remain in a precarious state and the risks to both that system and the global economy will be high. The danger that a new shock could Cause a widespread recession in the industrial world will be ever present in the months ahead”.
The forecast, based on the assessment of U.N. economic commissions in various parts of the world, said:
“A preliminary look at the prospects for the world economy in 1988 indicates that, under rather favorable assumptions, there might be a continued modest slowdown in the world economy overall, with considerable diversity among regions and countries in the. World and distressing prospects for the poorest countries.
“Furthermore, on less favorable assumptions, there is a risk of serious recession in the world economy, with the adverse consequences which this entails”.
It added: “The task for 1988 is to take concerted action to avert a world recession, and to chart a way out of the precarious disequilibria and debt problems that prevail both among developed countries themselves and between developed and developing countries.
Referring to the crash on world stock markets last October, it said that in a world of sovereign but interdependent nation states, governments must act to ensure greater financial and monetary stability, but that progress in that direction was slow.
‘The financial turmoil of the last quarter of 1987 was superimposed on, and indeed prompted by, some longstanding and unresolved global economic problems, it stated.
Article extracted from this publication >> January 15, 1988