World economy and energy production assessed and documented.

After the weak start to the 1990s, the world economy had moved towards a "cruising speed" of 3 per cent growth a year, beginning in 1994, Secretary-General Kofi Annan reported on 18 December 1997. World output had grown more than 3 per cent in 1997, and a further year of 3 per cent growth was forecast for 1998.

The financial turmoil from the emerging market economies of Asia was expected to result in an inflection in world economic growth, with the slowdown in the more seriously affected countries and its impact on their major trading partners being partially offset by strengthened momentum elsewhere, the Secretary-General stated. Nevertheless, the unknown duration and ramifications of the huge swing in financial market sentiments in 1997 made the overall economic outlook "particularly cloudy at the time", he said.

Among the developed economies, the major features of 1997 were the relative weakness of the Japanese and strength of the United States economies. The efforts of the European Union countries to meet the macroeconomic criteria for entry into the Economic and Monetary Union (EMU), in particular regarding budget deficits, had been a constraint on recovery and an added burden on unemployment. Moreover, the uncertainty surrounding the start of EMU - and the associated exchange rates, interest rates and macroeconomic policies - had caused some hesitation with regard to investment. As 1997 ended, however, the fact that it seemed more certain EMU would start on time and with a large number of participating countries reduced these uncertainties.

In the developing world, aggregate growth of gross domestic product of almost 6 per cent in 1997 depended less than previously on the dynamism of Eastern and Southern Asia. While the regional growth rates of Latin America and the Caribbean and Western Asia each exceeded 5 per cent, that of Africa slipped to only 3 per cent. Growth was forecast to pick up in Africa in 1998, albeit with a rate of only 4 per cent. Slower growth was foreseen in each of the other major regions, yielding an overall average growth rate of 5 per cent.

In the transition economies, 1997 might have marked a "watershed year", the Secretary-General said. At last, those economies as a group had begun to grow. While growth prospects in many of them were still fragile - the Russian Federation being an important case in point - they were generally positive. Certainly, had there not been widespread evidence of economic growth that...