The International Situation

The recovery from the 1974–75 recession in the international economy has proven to be particularly difficult to forecast. Thus while the second half of 1975 saw continuing doubts as to whether recovery was underway it became appaient by early 1976 that these doubts had been misplaced, and that a relatively rapid recovery of the International economy was in progress, particularly in the United States and In Japan. Forecasts for the second half of 1976 reflected this new found optimism. These forecasts were, however, again to be disappointed when It became apparent that an unexpected and widespread deceleration of growth was emerging as 1976 progressed, raising the spectre of further increases in unemployment. The reasons for this retreat from recovery are of particular significance to a survey of the international economy at the present time, since they bear on the question whether the deceleration of growth in 1976 lepresents a transitory period of adjustment in an international economy in which the force:; of expansion still exist or whether it indicates the growth of 1975 and early 1976 Itself to have been unsustainable.