ECONOMIC OUTLOOK FOR 1992

In November 1991, the Ministry of Trade and Industry or MTI forecast growth for 1992 at 5 - 7%. Since then, international economic developments have not dispelled the overall picture of uncertainty.

This uncertainty is reflected in the expectations of the business community. In the most recent survey of business expectations, 16% of firms in the manufacturing sector expect business conditions in the first half of 1992 to improve, 16% expect conditions to worsen, while 68% expect conditions to remain about the same as in the second half of 1991.

MTI's assessment is that the slow recovery of the US economy, and the economic problems in Europe and Japan, will dampen our prospects. It has revised the forecast for 1992 growth downwards, to 4 - 6%. The second half of the year is likely to show stronger growth than the first. This is slightly below our medium-term projection of sustainable growth because of less buoyant external demand conditions.