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World Economy

    Economy—overview: Growth in global output (gross world product, GWP) dropped to 2% in 1998 from 4% in 1997 because of continued recession in Japan, severe financial difficulties in other East Asian countries, and widespread dislocations in the Russian economy. The US economy continued its remarkable sustained prosperity, growing at 3.9% in 1998, and accounted for 22% of GWP. Western Europe's economies grew at roughly 2.5%, not enough to cut deeply into the region's high unemployment; these economies produced 21% of GWP. China, the second largest economy in the world, continued its rapid growth and accounted for 11% of GWP. Japan posted a decline of 2.6% in 1998 and its share in GWP dropped to 7.4%. As usual, the 15 successor nations of the USSR and the other old Warsaw Pact nations experienced widely different rates of growth. Russia's national product dropped by 5% whereas the nations of central and eastern Europe grew by 3.4% on average. The developing nations varied widely in their growth results, with many countries facing population increases that eat up gains in output. Externally, the nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, funds, and technology. Internally, the central government finds its control over resources slipping as separatist regional movements—typically based on ethnicity—gain momentum, e.g., in the successor states of the former Soviet Union, in the former Yugoslavia, in India, and in Canada. In Western Europe, governments face the difficult political problem of channeling resources away from welfare programs in order to increase investment and strengthen incentives to seek employment. The addition of more than 80 million people each year to an already overcrowded globe is exacerbating the problems of pollution, desertification, underemployment, epidemics, and famine. Because of their own internal problems, the industrialized countries have inadequate resources to deal effectively with the poorer areas of the world, which, at least from the economic point of view, are becoming further marginalized. In 1998, serious financial difficulties in several high-growth East Asia countries cast a shadow over short-term global economic prospects. The introduction of the euro as the common currency of much of Western Europe in January 1999 poses serious economic risks because of varying levels of income and cultural and political differences among the participating nations. (For specific economic developments in each country of the world in 1998, see the individual country entries.)

    GDP: GWP (gross world product)—purchasing power parity—$39 trillion (1998 est.)

    GDP—real growth rate: 2% (1998 est.)

    GDP—per capita: purchasing power parity—$6,600 (1998 est.)

    GDP—composition by sector:
    agriculture: NA%
    industry: NA%
    services: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): all countries 25%; developed countries 2% to 4% typically; developing countries 10% to 60% typically (1998 est.)
    note: national inflation rates vary widely in individual cases, from stable prices in Japan to hyperinflation in a number of Third World countries

    Labor force: NA

    Labor force—by occupation: NA

    Unemployment rate: 30% combined unemployment and underemployment in many non-industrialized countries; developed countries typically 5%-12% unemployment (1998 est.)

    Industries: dominated by the onrush of technology, especially in computers, robotics, telecommunications, and medicines and medical equipment; most of these advances take place in OECD nations; only a small portion of non-OECD countries have succeeded in rapidly adjusting to these technological forces; the accelerated development of new industrial (and agricultural) technology is complicating already grim environmental problems

    Industrial production growth rate: 5% (1997 est.)

    Electricity—production: 12.3427 trillion kWh (1994)

    Electricity—production by source:
    fossil fuel: NA%
    hydro: NA%
    nuclear: NA%
    other: NA%

    Electricity—consumption: 12.3427 trillion kWh (1994)

    Exports: $5 trillion (f.o.b., 1998 est.)

    Exports—commodities: the whole range of industrial and agricultural goods and services

    Exports—partners: in value, about 75% of exports from the developed countries

    Imports: $5 trillion (f.o.b., 1998 est.)

    Imports—commodities: the whole range of industrial and agricultural goods and services

    Imports—partners: in value, about 75% of imports by the developed countries

    Debt—external: $2 trillion for less developed countries (1998 est.)

    Economic aid—recipient: traditional worldwide foreign aid $50 billion (1995 est.)

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)