CHAPTER II. THE WORLD ECONOMY

The most important factor affecting our view of long-term prospects is the potential effect of developments in Eastern Europe. Since our last forecast, which was completed three months ago on 9th November 1989 the political map of Europe has changed. The Czechs, Rumanians and Bulgarians appear to have joined the Poles and the Hungarians in the drive for democracy and more open markets. The collapse of the East German regime, and the gathering pace of the drive for unification with the FDR has been even more remarkable. Almost any possible outcome will change the prospects for growth and economic developments in the whole of the non-Communist world. We would argue that these effects will not just be confined to Continental Europe.