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World Economic Survey 1978

Current Trends in the World Economy

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According to World Economic Survey 1978, the pace of world economic activity weakened in 1978. In developing countries, in particular, the trends towards lower rates of growth in output observed since 1975 were accentuated. The developed market economies continued to grapple with problems of insufficient recovery in productive investment. In the centrally planned economies, growth was restrained by external imbalances and international bottlenecks, especially in the energy and transport sectors.

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The centrally planned economies

Economic conditions in the centrally planned economies of Eastern Europe and the Union of Soviet Socialist Republics proved more difficult in 1978 than anticipated, and development patterns diverged significantly from the national economic plans in most countries. The growth of output slowed to the lowest rate experienced in almost two decades, while aggregate claims on resources tended to expand faster than anticipated, which put strains on the state of internal and external balance. External conditions were not favourable for the implementation of policies aimed at reducing trade deficits, especially in trade with the market economies. Export growth slowed down markedly, in spite of efforts to stimulate export production. Import expansion, on the other hand, accelerated and the over-all trade deficit of the region again increased significantly.

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