ECONOMIC INTELLIGENCE WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01316A000900040003-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 12, 2016
• Document Release Date: January 10, 2002
• Sequence Number: 3
• Publication Date: January 26, 1978
• Content Type: REPORT

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Economic Intelligence
Weekly Review
I:R 1IWR 78-004
26 Junucry 1978
copy Mt1
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN- Not Releasable to Foreign Nationals
NOCONTRACT- Not Releasable to Contractors or
Contractor/ Consultants
PROPIN- Caution-Proprietary Information Involved
NFIBONLY- NFIB Departments Only
ORCON- Dissemination and Extraction of Information
Controlled by Originator
REL. . . - This Information has been Authorized for
Release to ...
Classified by 015319
Exempt from General Declassification Schedule
of E.O. 11652, exemption category:
?58(1), (2), and (3)
Automatically declassified on:
date impossible to determine
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SECRET
NOFORN
Non-OPEC LDCs: Improvement in Current Account ..................... 1
Rapid export growth and continued restraint in imports brought the
combined current account deficit down by $3 billion in 1977, with results
varying widely among individual countries.
25Xt
Natural Rubber Agreement Could Spur Investment ............ . ...... 12
With oil price hikes pressing up production costs of synthetic rubber,
natural rubber producers feel a world stabilization agreement would bring
out substantial investment in new plantings.
Notes
France: Unemployment Decline Overstated 15
Publication of Interest, Statistics
CORRECTION: Holders of the Economic Intelligence Weekly Review of 19
January 1978 should correct the date in the heading of the table
continued on page 9-to 1976, from 1977.
i
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SECRET
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NON-OPEC LDCs: IMPROVEMENT IN CURRENT ACCOUNT
The combined current account deficit of the non-OPEC LDCs dropped by $3
billion (preliminary estimate) in 1977, with results varying widely among individual
countries. This improvement, following an even larger drop in 1976, resulted from
rapid export growth and continued restraint in imports; both of these basic factors lost
force after midyear. Key elements in the variations among the countries include (a)
sharp breaks in prices of several international commodities during the summer and (b)
decisions by some dynamic LDCs to stimulate their economies and spur development
programs.
The 1978 outlook almost uniformly suggests a moderate deterioration in current
account balances. The combined deficit probably will exceed the $25 billion total of
1976. Unexpectedly stiff increases in oil prices or major droughts in key food
producing countries would raise the 1978 deficit still further.
The conditions that supported the substantial current account improvement of
1976 extended through mid-1977. Demand for LDC exports held up fairly well in the
major developed countries, especially the United States and Japan. First half 1977
exports to these two nations were up 30 percent and 22 percent, respectively, over the
corresponding 1976 returns. Sharp price increases for many major LDC pro-
ducts-particularly coffee, tea, and cotton-were instrumental in this gain.
Despite the steady improvement, the LDCs did not generally exploit trade gains
for domestic growth; they maintained the cautious approach that had characterized
their fiscal, monetary, and commercial policies since early 1975. In the first and
second quarters of 1977, imports grew only 14 percent and 8 percent, respectively,
over the same periods in 1976, with most of the increase tied to higher prices. As a
result, reserve holdings increased by about $6 billion in first half 1977, continuing the
strong buildup that had taken place in 1976.
After mid-1977, the improvement in non-OPEC LDC current accounts tailed off:
? Real growth in LDC exports practically disappeared in second half 1977
as a result of languid economic recovery in the OECD countries.
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? Prices for a number of LDC export commodities-coffee, tea, and
cotton-moved sharply downward at midyear; copper and sugar prices
remained depressed.
? Import growth probably began to pick up toward the end of 1977.
Non-OPEC LDCs: Combined Current Account Position and External Financing
Billion US $
Trade balance ... .................. ...... ,,,.... . . ............... -? 27 -16 -12
Exports, f.o.b 91 109 125
Imports, f.o.b ............ .:. ............................. ... ................... i..,.... 118 125 137
Services, net .......... .. .. ... ........ ........ . -11 -13 -15
Balance on goods and services ....... . ... .... ............ .,............. -88- - 29 - 27
Private transfers . . ......... ............................... .:... 4 4 5
Current account deficit J....., .,.. ...... . ................. ... .....,.... 34 25 22
Debt amortization ......., ......,,. 10.5 12.1 13.5
Financing requirements {excluding reserve asset changes) ..,,.... .,.... 44.5 37.1 35.5
Reserve asset changes ............ 0,3 9.8 6.0
Gross financing requirements- ... ... .... ....... 44.8 46.9 41.5
Financing other than by external borrowing .............................. 9.6 10.6 11.5
Financing by external borrowing .... ..................
. ......: ................ 35.2 36.3 30.0
Official . 15.2 15.5 16.0
Private 11 11.5 12.5
Short term capital flows (including errors and ommissions) ..... 9 9.3 1.5
Country Groupings
Lags in reporting make it difficult to tell how widespread and persistent these
patterns have been. On the basis of partial data, we have divided the non-OPEC LDCs
into four rough categories with regard to current account performance.
1. Imports Restrained Despite Export Gains. A number of LDCs still are
combining strong export growth with tightly controlled or slower growing imports.
Many in this group benefited from star performances of major products -coffee was
most often the leader-and a sufficiently diversified export mix to cushion the
leveling off of developed country demand. The divergence between import and
export growth led to greatly improved current account positions in Brazil and Mexico
and to improvements in India, the Philippines, and Jamaica. In the case of India, the
improvement stemmed mainly from good harvests, which all but eliminated the need
for grain imports.
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Countries in this first group probably accounted for approximately $5 billion of
the gross improvement in the total non-OPEC LDC deficit, with Brazil and Mexico
alone contributing more than $3 billion. Smaller countries among the gainers included
Cameroon and Ghana. Some of these smaller countries did less well in second half
1977 because of declines in commodity prices.
Selected Non-OPEC LDCs: Current Account Balances
Argentina ........................................................................
-1,300
600
1,300
Bangladesh ......................................................................
-1,000
-500
-390
Bolivia ......... ..., ...............................................................
-170
-140
-185
Brazil ..............................................................................
-6,700
-6,200
-4,500
Chile ...............................................................................
-600
20
-300
Colombia ....... .................................................................
-125
187
772
Egypt ........ ........ ...........................................
-2,520
-2,000
-2,200
India ......... ......................................................
-1,300
1,000
1,200
Ivory Coast .... .................................................................
-425
-239
-25
Jamaica ..........................................................................
-300
-300
-50
Malaysia ..........................................................................
-160
670
355
Mexico' ....s ..............? ..............
-3,700
-3,000
-1,600
Morocco ......: ......... .......................................
-500
-1,400
-800
Pakistan .........................................................................
-935
-925
-1,105
Peru ................................................................................
-1,540
-1,160
-860
Philippines .....................................................................
-1,000
-1,100
-900
South Korea ...........:........................................................
-2,000
-500
30
Sri Lanka ........................................................................
-185
- 65
20
Syria , ....... ......
-560
-1,175
-1,000
Sudan .............................................................................
-475
-170
-375
Taiwan ............................................................................
-600
400
500
Thailand ................
-630
-490
-1,000
Tunisia ............................................................................
-220
-325
-335
Zaire ........... :..:... ....................................... ........-..... .........
-700
-100
-400
Zambia .........................................
- 600
-200
-200
' Mexican data exclude reinvested earnings.
2. Balanced Growth in Trade Accounts. Countries in the second-and most
numerous-group also benefited from strong first-half demand for exports; they were
less under the gun to constrain imports because of past conservative management of
their financial affairs. LDCs such as Costa Rica, Nicaragua, Sri Lanka, Thailand,
Ivory Coast, and Kenya enjoyed exceedingly strong reserve positions as a result of
past export earnings-mostly from coffee-and could afford more freedom in their
import policies.
With exceptionally good current account performances in 1976, several LDC
exporters of manufactures-particularly South Korea, Taiwan, and Malaysia-also
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experienced good export growth in 1977. Because their exports normally have a high
content of imported materials and components, both sides of their international
balance sheet frequently grow together. Faced with increasing protectionism in 1977,
they spurred export diversification and strengthened their positions in OPEC markets,
particularly in the Middle East.
3. Trade Stalled. A few non-OPEC LDCs faced depressed export markets or
unsettled domestic conditions and were under constraints, similar to those of Mexico
and Brazil, to wring out their economies. Countries such as Guyana (sugar), Sudan
(cotton), and Zambia (copper) generally did well to hold the line at their 1976
positions. The common tendency among countries in this group was for a moderately
larger current account deficit.
4. Imports Still Expanding Despite Declining Exports. This group of non-
OPEC LDCs saw imports rise while exports sputtered or declined. Most of this
group-for instance, the drought-stricken West African countries-were saddled
with domestic conditions that ruled out restraints on imports in the short run. Also
falling in the group are a few countries, such as Burma and Zaire, that have
persistently mismanaged their external economic affairs. The third and fourth groups
together offset roughly $2 billion of the $5 billion improvement in the current account
deficit attributable to countries in the first group.
Global trade almost certainly will expand less rapidly in 1978, mainly because of
slow economic growth anticipated in the developed economies. For the non-OPEC
LDCs, this portends a reversal of the $3 billion improvement achieved last year, with
the probability that the combined deficit will reach $25 billion to $28 billion. The
actual outcome will depend largely on how determined the LDCs are in limiting
imports.
LDC exports in 1978 should grow no more than the 15 percent of 1977 and
probably will be on the lower side of this figure. Given the small gains anticipated in
the OECD economies, LDCs can expect export volume gains of only 3 to 4 percent. In
the case of coffee, volume gains expected this year should offset reduced prices,
leaving the Latin American countries in roughly the same condition on this account as
last year. For most other LDC export commodities-the metals group, cotton, and
sugar-low prices will mean lower LDC earnings, particularly for the African and
Caribbean nations. The growth of LDC exports of manufactures will slow, a decline
being softened by sales to Middle East OPEC countries from South Korea, Taiwan,
Brazil, India, and others.
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Import trends in 1978 are more difficult to forecast. Third quarter 1977 exports
from Big Seven countries to LDCs were up only marginally from the second quarter.
On the other hand, the leveling off of growth in LDC reserves in the same quarter
could signal an upswing in imports. For the LDC group as a whole, import growth this
year should increase by 12 to 14 percent (3 to 5 percent in real terms), somewhat
higher than the 1977 level. A number of LDC governments will be under pressure in
1978 to step up domestic spending to replace the declining stimulus from exports to
OECD nations. Many of the better managed will of course hold the line, but, for most,
imports will grow more rapidly than exports.
Brazil and Mexico will again loom large in the picture, jointly accounting for a
possible rise in the deficit of about $500 million to $1 billion. Mexico is intent on
spurring domestic growth, mainly by large-scale investment in its oil and gas
industries. Although this policy will lead to current account gains in the medium term,
the deficit for Mexico should rise in 1978 to roughly $2 billion from last year's $1.6
billion. We anticipate restrained economic policies in Brazil for the remainder of the
year. Given increases in the volume of coffee exports, this could mean a slight
lowering of its current account deficit, to about $4.2 billion. The problems of a
presidential transition, however, add an element of uncertainty this year; another
deterrent to improvement is the lack of buoyancy in export markets for products other
than coffee. At best, Brazil could offset some of the deterioration in the Mexican
deficit but the impact would be small. (Unclassified)
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SECRET
NATURAL RUBBER AGREEMENT COULD SPUR INVESTMENT
Propelled by political and economic considerations, natural rubber producers and
consumers probably will negotiate a price/supply stabilization agreement following
next month's UNCTAD meeting in Geneva. With oil price hikes causing costs of
production of synthetic rubber to rise more rapidly, natural rubber producers have the
opportunity to increase their share of the market. Although locked in to present
expansion rates for the near term, producing countries could boost output in the 1980-
85 period by major financial commitments in the next year or so. A commodity
stabilization agreement could provide security for the necessary additional investment
in new higher yield plantings.
Upcoming Decision in Geneva
For a year now, natural rubber producing and consuming countries have been
meeting periodically to analyze the essential elements of a stabilization agreement.
These deliberations, part of the UNCTAD Integrated Program for Commodities, will
culminate with a decision late next month on whether or not to enter formal
negotiations for a natural rubber agreement. Until recently, the United States and
several European consumers had been pressing for further stufLast month,
however, the EC joined Japan and other consuming countries favoring the rubber
producers' call for early negotiations. The EC action, coming on the heels of
suspended common fund negotiations, may have been an effort to show good faith in
the North-South dialogue. Faced with producer threats to go it alone, most consuming
nations also appear eager to preserve a voice in any rubber stabilization plan. It now
appears likely that formal negotiations on a natural rubber agreement will commence
sometime after February.
The final agreement seems likely to incorporate the key feature of the current
International Tin Agreement, namely an international buffer stock from which sales
and purchases would be made to keep prices within a predetermined band. To defend
a band on the order of 10 percent, it is generally conceded that the buffer stock would
have to be about one-half million tons. Purchases and sales from the stock would be
managed by a joint producer-consumer International Rubber Council.
Economic advantages for each side are expected to push negotiations toward an
early agreement. Over the longer term, consumers seek to hold down price increases
by expanding the supply of natural rubber, which is based on renewable resources and
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is less costly to produce than synthetic. Natural rubber producers see an agreement as
a means to achieve price stability and to stimulate investment, expand output, and
increase their share of world rubber sales.
Market Outlook Through 1985
We expect total demand for all rubber to grow at an average of about 5 percent
yearly, leading to consumption of 14 million tons in 1980 and 17 million tons in 1985.
This is substantially below the 1960-73 rate of about 7 percent and reflects the impact
of oil price increases on the size and number of motor vehicles as well as slower
economic growth. Recent projections of motor vehicle fleets in the United States,
Japan, and the four largest EC countries suggest only a 3.3 percent average yearly
growth in rubber use through 1980. These countries, which account for more than
one-half of world rubber use, already have a high ratio of vehicles per capita; in most
other countries small, expanding vehicle parks permit a more rapid growth in rubber
use.
A slight shift in favor of natural over synthetic rubber has taken place in recent
years, primarily because of increasing demand for natural rubber for the production
of radial tires and higher prices for synthetic. The outlook is for tighter supplies of the
petrochemicals used in synthetic production; some tire companies with large synthetic
rubber capacities are increasing investment in rubber plantations.
The basis for any large expansion in natural rubber output rests with small-
holders, who account for well over 60 percent of global output. They cut back
production early when price declines-even in the short run-and are slow to invest
without guarantees of price stability. Malaysia, Indonesia, and. other producers
acknowledge the need to assist these small producers and would be more willing to
commit funds with a price stabilization agreement.
Supply Factors
World rubber capacities will exceed anticipated demands to 1980. On the basis of
current industry plans, we estimate that natural and synthetic capacity will reach 16
million tons by 1980-about 15 percent more than anticipated consumption. Synthetic
rubber capacities will total 11.7 million tons, according to industry projections, while
natural rubber capacity will be about 4.5 million tons.
Present plantings and yields in Malaysia, Indonesia, and Thailand-representing
about four-fifths of supply-suggest that natural rubber output in 1980 will be about
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4.3 million tons, or 95 percent of capacity. Despite excess synthetic rubber capacity,
natural rubber producers should have a competitive advantage and be able to sell all
they can produce between now and 1980.
Natural rubber's advantage stems from the quadrupling of petroleum prices in
1973/74. This hiked production costs of synthetic rubber by 17 cents per pound, but
costs of natural rubber rose by only 1.5 cents. The break-even point for the average
synthetic rubber producer now is 40 cents per pound, compared with 25 cents per
pound for inefficient producers of natural rubber. Cost disparities are even greater
between natural rubber and polyisoprene, a synthetic rubber that is chemically
identical to, and competes more directly with, natural rubber in such end uses as
radial tires. Because of the cost differentials, the US polyisoprene industry has been
forced to cut output since the oil crisis to about 60 percent of capacity.
Capacity limitations will restrict natural rubber producers to about one-third of
the rubber demanded in 1980-roughly the present market share. Demand for
synthetic rubber will remain strong, enabling the industry to push through some of its
increased costs. We also look for natural rubber prices to move upwards under the
influence of global inflation and higher synthetic rubber prices.
Current expansion plans would permit natural rubber producers to retain their
present market share and provide about 51/z million tons in 1985. Any expansion would
depend on the willingness of producers and their governments to promote further
investment in trees and technology now.
Some indication of the potential for increased output can be gained by comparing
Indonesian with Malaysian yields. Output in Indonesia averages 0.4 tons per hectare
compared with 0.8 tons per hectare by Malaysia's smallholders and 1.2 tons per
hectare by Malaysian rubber estates. If Indonesia, by planting higher yielding strains,
could boost yields to the level of Malaysia's smallholders, an additional 1 million tons
of natural rubber would be available by 1985.
Less dramatic increases in output could be achieved through improved methods
of cultivation, fertilization, and tapping and processing natural rubber. Governments
of the rubber producing countries also are trying to expand output by reducing high
taxes, lowering export duties, and expanding direct financial assistance to small-
holders. Individual producing countries already conduct expansion programs but have
yet to undertake major financial commitments. (Confidential)
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Japan Announces Robust Current Account Surplus
Japan posted a record current account surplus in 1977 of $11.1 billion; the
previous high was $6.6 billion, set in 1972. For the second year in a row, exports
jumped more than 20 percent, in
part because of strong auto sales. Japan: Current Account
Higher oil payments helped boost
the import bill by 10 percent. Billion Us $
Tokyo announced that the vol-
ume of exports increased 5 percent
last year. We believe volume growth
was closer to 13 percent. The official
figure announced by the Japanese
was derived from the widely used
1976
1977
Trade balance .......................................
9.9
17.6
Exports ...... ................................... .......
66.0
79.3
Imports .... .......................................
56.1
61.7
Net services and transfers ....
-6.2
-6.5
Current account balance ......................
3.7
11.1
unit-value price index, based on a 1970 price survey. Our estimate was calculated
using the recently revised Japanese index of export-contract prices, based on a 1975
survey. The higher estimate is probably more accurate because:
? The composition of Japanese exports has changed dramatically since 1970.
For example, transportation machinery-a high growth sector-carries only
a 17-percent weight in the 1970 series and now accounts for 30 percent of
Japanese foreign sales.
? The volume derived from the new series is much closer to the 11-percent
gain in export volume recorded in the 1977 Japanese GNP accounts.
Import volume-taken from either data series-grew by roughly 3 percent. In this
case, the choice of base year weights is less important because the physical
composition of Japanese imports has changed little over the past decade. (Unclassified)
France: Unemployment Decline Overstated
Registered unemployment in France fell in December for the fourth consecutive
month. The four-month cumulative decline from the record August figure of 1.22
million is 190,000-almost 16 percent. This abrupt reversal of the trend has provoked
opposition charges that the government is manipulating the data for political purposes.
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In fact, most of the decline is due to the outdated seasonal adjustment procedure
being used. French government economists are aware of the problem but are reluctant
to alter their methodology because-ironically-they are afraid that a change now
would lead to further charges of political manipulation.
A more realistic CIA seasonally adjusted unemployment series shows a peak of
1.16 million in September and a decline of 87,000 since then. This reduction can be
explained by special hiring incentives, which expired on 31 December, and a youth
hiring drive vigorously pushed by the employers' association.
The special factors that pushed the official unemployment figures down during
the fall are now essentially played out. With economic activity still sluggish, the
official January and February unemployment figures are likely to show embarrassing
increases. Nevertheless, the February figure-which will be released between the first
and second rounds of the parliamentary election-still should be well below the
August peak. (Confidential)
Publication of Interest *
The Soviet State Budget Since 1965
(ER 77-10529, January 1978, Unclassified)
This Research Paper surveys the major revenue and expenditure patterns of the
USSR state budget from 1965 through the 1977 plan. It relates budgetary appropri-
ations and receipts to changing Soviet economic priorities and explains how the
budget's role in the state financial system has evolved since the economic reforms of
the mid-1960s.
* Copies of this publication may be ordered by calling
16 SECRET
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 National
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Assessment
Center
Economic Indicators
Weekly Review
26 January 1978
ER EI 78-004
26 January 1978
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This publication is prepared for the use of U.S. Government
officials. The format, coverage and contents of the publication are
designed to meet the specific requirements of those users. U.S.
Government officials may obtain additional copies of this document
directly or through liaison channels from the Central Intelligence
Agency.
Non-U.S. Government users may obtain this along with similar
CIA publications on a subscription basis by addressing inquiries to:
Document Expediting (DOCEX) Project
Exchange and Gifts Division
Library of Congress
Washington, D.C. 20540
Non-U.S. Government users not interested in the DOCEX
Project subscription service may purchase reproductions of specific
publications on an individual basis from:
Photoduplication Service
Library of Congress
Washington, D.C. 20540
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1. The Economic Indicators Weekly Review provides up-to-date information
on changes in the domestic and external economic activities of the major non-
Communist developed countries. To the extent possible, the Economic Indicators
Weekly Review is updated from press ticker and Embassy reporting, so that the
results are made available to the reader weeks-or sometimes months--before receipt
of official statistical publications. US data are provided by US government agencies.
2. Source notes for the Economic Indicators Weekly Review are revised every
few months. The most recent date of publication of source notes is 20 October 1977.
Comments and queries regarding the Economic Indicators Weekly Review are
welcomed.
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 INDUSTRIA pr~r ~~ ,~J411/30 : CIA-RDP79T0000900 5
t+ ~v,V INDEX: 1970=100, , seasonally adjusted
usted
Japan
West Germany
130
120
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
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United Kingdom
Italy
JAN APR, JUL OCT
1977
Percent
Change
f
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
f
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
rom
Previous
1 Year
3 Months
LATEST
rom
Previous
1 Year
3 Months
MONTH
Month
1970
Earlier
Earlierl
MONTH
Month
1970
Earlier
Earlierl
United States
NOV 77
0.5
3.6
6.1
2.6
United Kingdom
OCT 77
-1.3
0.3
--2.3
-0.4
Japan
OCT 77
-0.4
3.7
3.3
1.9
Italy
NOV 77
2.4
2.5
-5.9
10.4
West Germany
NOV 77
0.9
2.2
1.7
3.5
Canada
OCT 77
0
3.9
4.5
-0.3
France
OCT 77
--1.6
2.9
0
4.2
lAverage for latest 3 sl/30A cIA-RDP79TO1316A000900040003-5
Semilogarithmic Scale
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UNEMPLOYMENT PERCENT OF LABOR FORCE
United States
West Germany
4.7
1972 1973 1974 1975 1976 1977
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A-4
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Italy (quarterly)
7
A labor force survey based on new definitions of economic activity sharply raised the official estimate of Italian unemployment in first quarter 1977. Date for earlier periods thus are not comparable.
Italian data are not seasonally adjusted..
THOUSANDS OF PERSONS UNEMPLOYED
1 Year
Earlier
3 Months
Earlier
1 Year
Earlier
3 Months
Earlier
United States
DEC 77
6,337
7,519
6,773
United Kingdom
DEC 77
1,428
1,326
1,446
Japan
SEP 77
1,130
1,080
1,190
Italy
77 IV
1,598
777
1,692
West Germany
DEC 77
1,027
1,009
1,038
Canada
DEC 77
911
772
798
France
DEC 77
1,026
930
1,156
NOTE: Data are seasonally adjusted. Unemployment rates for France are estimated. The rates shown for Japan and Canada are
roughly comparable to US rates. For 1975-77, the rates for France and the United Kingdom should be increased by 5 percent and
15 percent respectively, and those for West Germany decreased by 20 percent to be roughly comparable with US rates.
Approved For Release 2002/01/30t -CIA-RDP79T01316A000900040003-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
DOMESTIC PRICES1 INDEX: 1970=100
175
Japan
West Germany
Semilogarithmic Scale
Consumer
France
225
200
175
1Wholesale price indexes cover industrial goods.
Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
A-6
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
United Kingdom
APR JUL OCT JAN APR JUL OCT
1976 1977
Percent
Change
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
from
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
from
Previous
1970
1 Year
3 Months
LATEST
Previous
1970
1 Year
3 Months
MONTH
Month
Earlier
Earlier
MONTH
Month
Earlier
Earlier
United States
DEC 77
0.4
8.3
6.7
4.5
United Kingdom
DEC 77
0.5
14.4
15.2
6.2
NOV 77
0.5
6.5
6.7
4.7
NOV 77
0.5
13.6
13.0
6.0
Japan
OCT 77
-0.3
7.4
0.1
0
Italy
SEP 77
1.0
15.5
14.0
7.4
NOV 77
-1.2
10.2
6.2
4.5
West Germany
NOV 77
-0.1
5.0
1.7
-0.8
Canada
OCT 77
0.7
10.0
9.9
5.3
NOV 77
0.1
5.4
3.7
0.5
DEC 77
0.7
7.5
9.5
9.6
France
SEP 77
0.6
8.2
6.1
5.4
NOV 77
0.4
9.0
9.1
8.5
Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
A-7
 p
-
GNP '
RETAIL SALES '
Constant Market Prices
Constant Prices
Average
Average
Annual Growth Rate
Since
Annual
Growth Rate Since
Percent Change
Percent Change
Latest
from Previous 1 Year
Previous
Latest
from Previous
I Year
3 Months
Quarter
Quarter 1970 Earlier
Quarter
Month
Month
1970
Earlier
Earlier'
United States 77 IV
1.0 3.3 5.7
4.2
United States
Nov 77
0.9
3.4
6.0
9.7
Japan 77 III
0.5 5.4 5.1
1.8
Japan
Jun 77
-0.1
9.8
2.6
1.4
West Germany 77 III
-0.1 6.1 2.1
-0.4
West Germany
Sep 77
-0.8
2.3
1.7
9.5
France 77 III
0.2 7.2 2.3
0.9
France
Sep 77
-4.2
- 1.3
-8.1
-2.8
United Kingdom 77 II
0.7 1.6 1.9
2.9
United Kingdom
Dec 77
3.2
1.4
1.1
0.8
Italy 77 II
-1.9 2.8 2.8
-7.3
Italy
Aug 77
5.7
3.6
0.1
14.2
Canada 77 III
1.3 4.9 2.5
5.3
Canada
Oct 77
2.0
4.3
1.4
11.5
' Seasonally adjusted.
' Seasonally adjusted.
' Average for latest 3
months compared with avera
ge for previous 3 months.
FIXED INVESTMENT '
WAGES IN MANUFACTURING'
Non-residential; constant
rices
Average
p
Annual
Growth Rate
since
Average
Percent Change
Annual Growth Rote Since
Latest
from Previous
1 Year
3 Months
Percent Change
Period
Period
1970
Earlier
Earlier'
Latest
from Previous 1 Year
Previous
United States
Nov 77
0.5
7.6
8
1
8
2
Quarter
Quarter 1970 Earlier
Quarter
.
.
United States 77 IV
2.0 2.3 9.4
8.4
Japan
Aug 77
2.2
17.0
9.8
8.7
Japan 77 II
0.5 1.1 4.5
2.0
West Germany
77 III
1.2
9.3
7.4
5.0
West Germany 77 III
1.7 0.5 8.3
6.8
France
77 I
2.3
14.1
0
9.5
France 75 IV
8.8 4.2 2.9
40.1
United Kingdom
Sep 77
0
15.2
3.1
2.7
United Kingdom 77 II
11.2 1.7 8.0
53.2
Italy
Sep 77
0
20.8
23.8
22.3
Italy 77 II
-7.8 2.5 10.3
-27.6
Canada
Oct 77
0.2
11.3
11.4
8.9
Canada 77 III
- 1.1 5.8 3.2
-4.2
' Hourly earnings (seasonally adjusted) for the United States, Japan, and Canada; h
ourly wage
rates for others. West German and F
rench data refer
to the beg
inning of th
o quarter.
Seasonally adjusted.
'Average for latest 3
months comp
ared with that for previous
3 months.
MONEY MARKET RATES
Percent Rate of Interest
1 Year
3 Months
1 Month
Representative rates
Latest Date
Earlier
Earlier
Earlier
United States
Commerical paper
Jan 18 6.89
4.75
6.57
6.64
Japan
Call money
Jan 20 4.75
7.00
4.88
5.25
West Germany
Interbank loans (3 months)
Jan 18 3.53
4.78
4.08
3.80
France
Call money
Jan 20 8.88
9.88
8.50
9.13
United Kingdom
Sterling interbank loans (3
months)
Jan 20 6.19
14.06
4.93
6.74
Canada
Finance paper
Jan 20 7.12
8.25
7.30
7.09
EL'rodollars
Three-month deposits
Jan 20 7.43
5.25
7.05
7.00
Approv
ed For R010-ase-200
9101130
-
A000900040003-5
 EXPORT PROWroved For Release 2002/01/30 : CI
-FRF4MMI-11P11MA000900040003-5
us $
National Curren
cy
Average
Average
Annual
Growth Ra
te Since
Annual Growth Rate Since
Percent Change
Percent Change
Latest from Previous
1 Year
3 Months
Latest from Previous
1 Year 3 Months
Month
Month
1970
Earlier
Earlier
Month Month
1970 Earlier Earlier
United States
Nov 77
1.1
9.3
2.7
3.8
United States
Nov 77 1.1
9.3 2.7 3.8
Japan
Jul 77
-1.8
10.4
10.4
-4.4
Japan
Jul 77' -1.0
6.3 3.1 -5.3
West Germany
Oct 77
3.1
11.4
7.5
1.9
West Germany
Oct 77 1.2
4.3 0.7 - 1.2
France
Sep 77
-1.4
11.2
8.3
12.1
France
Sep 77 -0.9
9.4 8.5 10.1
United Kingdom
Dec 77
2.1
11.7
21.9
33.0
United Kingdom
Dec 77 0.1
15.6 10.3 3.8
Italy
Aug 77
1.4
11.4
13.2
21.1
Italy
Aug 77 1.4
16.9 19.2 19.2
Canada
Oct 77
-0.6
8.7
-5.6
- 11.4
Canada
Oct 77 0
9.4 6.5 1.3
IMPORT PRICES
OFFICIAL RESERVES
National Currency
Average
Billion US $
Annual
Growth Rate Since
Latest Month
Percent Change
I Year 3 Months
Latest from Previous
1 Year
3 Months
End of Billion US $
Jun 1970 Earlier Earlier
Month
Month
1970
Earlier
Earlier
United States
Oct 77 19.0
14.5 19.0 18.9
United States
Nov 77
1.1
13.0
8.6
3.3
Japan
Nov 77 22.1
4.1 16.7 17.8
Japan
Jul 77
-1.5
10.5
-2.3
7.0
West Germany
Nov 77 36.8
8.8 34.6 34.9
West Germany
Oct 77
-1.3
3.8
0.4
-11.3
France
Oct 77 10.1
4.4 9.o 9.9
France
Sep 77
-1.0
10.1
7.4
0.6
United Kingdom
Oct 77 20.4
2.8 4.8 13.0
United Kingdom
Dec 77
0.1
18.1
3.0
-6.7
Italy
Nov 77 11.7
4.7 6.5 10.5
Italy
Aug 77
2.7
20.9
12.4
19.0
Canada
Nov 77 4.2
4.3 5.1 4.8
Canada
Oct 77
1.0
8.7
15.6
2.0
CURRENT ACCOUNT BALANCE
BASIC BALANCE'
Current and Long-Term-Capital T
ransactions
Cumulative (Million US $)
Cumulative (Million US $)
Latest
Latest
Period Million US $ 1
977
1976
Change
Period Million US $
1977 1976 Change
United States'
77 III
-4,302 -1
3,064
33
-13,097
United States
No longer published'
Japan
Oct 77
1,356 7,834
2,452
5,382
Japan
Oct 77 739
5,161 1,895 3,266
West Germany
Nov 77
605 2,364
2,250
113
West Germany
Oct 77 831
-3,660 1,841 -5,501
France
77 III
-786 -2,809 -
4,483
1,674
France
77 IIV -1,123
-2,908 -6,121 3,214
United Kingdom
77 11
-474 -1,490 -
1,277
-213
United Kingdom
77 II 1,409
2,075 -1,119 3,195
Italy
77 II
161 -768 -
2,859
2,091
Italy
77 II 97
-395 -2,963 2,568
Canada
77 III
-1,146 -4,102 -
3,215
-886
Canada
77 IIV 345
-447 3,239 -3,686
Converted to US dollars at the current market rates of exchange.
Converted to US dollars at the current market rates of exchange.
' As recommended by the Advisory Committee on the Presentation of Balance of Payments
' Seasonally adjusted.
Statistics, the Deportment of Commerce no longer publishes a book balance.
TRADE-WEIGHT
ED EXCHANGE RATES 1
EXCHANGE RATES
Spot Rate
As of 20 Jan 78
Percent Ch
ange from
Percen
t Change from
As of 20 Jan 78
US $
l year
3 Months
1 Year
3 Months
Per Unit
19 Mar 73
Earlier
Earlier
13 Jan 78
19 Mar 73 Earlier
Earlier 13 Jan 77
Japan (yen)
0.0041
8.78
20.12
3.58
-0.36
United States
2.24 -3.41
-2.90 0.28
West Germany
0.4711
33.05
13.03
6.57
-0.05
Japan
13.19 18.08
2.02 -0.29
(Deutsche mark)
West Germany
30.36 6.11
2.11 0.02
France (franc)
0.2114
-4.08
5.16
2.33
-0.48
France
-10.45 -2.95
-2.84 -0.46
United Kingdom
1.9340
-21.41
12.70
8.84
0.10
United Kingdom
-25.07 7.72
4.94 0.19
(pound sterling)
Italy
-41.59 -6.30
-3.67 0.79
Italy (lira)
0.0011
-35.20
1.15
0.88
0.61
Canada
--8.83 -10.61
-1.03 -0.51
Canada (dollar)
0.9048
-9.31
-8.55
0.06
- 0.53
' Weighting is based on
each listed country's trade with 16 other industrialized countries to
reflect the competitive Impact of exchange rate variations among the major currencies.
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
FOREIGN TRADE BILLION US $, f.o.b., seasonally adjusted
United States
14.0
12.0
10.0
Japan
West Germany
10.0
8.0
Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
United Kingdom
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE
LATEST
MONTH
MILLION
US $ 1977
1978
CHANGE
NOV 77
9,304
109,078
104,463
4.4?o
United Kingdom
DEC 77
5,226
56,098
44,336
26.5
11,386
133,556
109,475
22.0%
5,375
59,002
50,823
16.1%
Balance
-2,082
-24,479
-5,012
-19,487
Balance
-148
-2,904
-6,486
3,583
OCT 77
6,580
65,066
54,025
20.4??
Italy
NOV 77
4,183
37,310
33,427
11.6'
5,168
51,065
45,731
11.7%
3,728
40,042
36,777
8.9%
Balance
1,412
14,001
8,294
5,707
Balance
455
-2,731
-3,349
618
West Germany
NOV 77
10,046
106,794
92,096
16.0?c
Canada
NOV 77
3,008
37,820
35.202
7.4?a
8,357
87,339
75,375
15.9%
2,906
36,120
34,726
4.0%
Balance
1,689
19,455
16,722
2,734
Balance
103
1,700
475
1,225
DEC 77
5,903
65,087
56,844
14.5??
5,557
67,389
61,051
10.4?0
Approved For Release 2002/01/39.1CIA-RDP79TO1316A000900040003-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
FOREIGN TRADE PRICES IN US $1
United States INDEX: JAN 1975 =100
Japan
105
104
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1ipproved For Releoi;452002/01/301?VaRDP79T01a49 90900040003-5
1Export and import plots are based on five month weighted moving averages.
A-12
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
France
United Kingdom
Italy
Canada
Approved lr7P4elease 200:/177 : CIA-RDP* 316A0009900a03-5
575078 1 78
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
SELECTED DEVELOPING COUNTRIES
MONEY SUPPLY'
INDUSTRIAL PRODUCTION'
Average
Average
Annual
Growth Rate Since
Annual Growth Rote Since
Percent Change
Percent Change
Latest
from Previous
1 Year
3 Months
Latest
from Previous
1 Year 3 Months
Month
Month
1970
Earlier
Earlier
Period
Period
1970 Earlier Earlier'
Brazil
Aug 77
0
36.7
46.2
59.1
India
Sep 77
0.4
9.4 48.1 118.6
India
Aug 77
2.9
13.4
15.6
7.8
South Korea
Sep 77
-1.0
22.3 17.6 32.6
Iran
Sep 77
3.3
28.5
21.2
- 1.4
Mexico
Sep 77
0.2
6.0 5.3 11.2
South Korea
Oct 77
5.9
32.5
47.9
43.1
Nigeria
76 IV
0.2
11.3 9.0 0.7
Mexico
Oct 77
4.9
19.5
26.6
21.9
Taiwan
Sep 77
7.2
15.0 12.3 -2.0
Nigeria
Apr 77
-2.3
36.9
47.5
99.7
Seasonally adjusted.
Taiwan
Jul 77
1.4
24.4
27.1
19.9
s Average for latest 3 months compared with average
far previous 3 months.
Thailand
Jun 77
-0.9
13.2
13.0
14.9
Seasonally adjusted.
2 Average for latest
3 months compared with average for previous 3 months.
CONSUME
R PRICES
WHOLESALE PRICES
Average
Average
Annual Growth Rate Since
Annual Growth Rote Since
Percent Change
Percent Change
Latest
from Previous 1 Year
Latest
from Previous
1 Year
Month
Month
1970 Earlier
Month
Month
1970
Earlier
Brazil
Dec 77
2.3
27.4 43.1
Brazil
Oct 77
2.3
27.2
34.4
India
Sep 77
1.2
8.5 9.6
India
Nov 77
-0.7
8.7
4.0
Iran
Nov 77
0.7
12.2 23.9
Iran
Nov 77
1.9
10.3
12.3
South Korea
Nov 77
0.4
14.2 10.6
South Korea
Nov 77
0.4
16.0
8.8
Mexico
Nov 77
1.1
14.9 22.0
Mexico
Nov 77
0
16.1
23.1
Nigera
Jun 77
4.0
16.2 23.7
Taiwan
Sep 77
-0.5
8.9
3.8
Taiwan
Sep 77
-1.9
10.9 10.4
Thailand
Aug 77
1.1
10.2
7.9
Thailand
Sep 77
1.0
8.8 9.3
EXPORT PRICES
OFFICIAL RESERVES
US $
Million US S
Average
Latest Month
Annual Growth Rate Since
1 Year
3 Months
Percent Change
End of
Million US $ Jun 1970
Earlier
Earlier
Latest
from Previous
1 Year
Period
Period
1970 Earlier
Brazil
Aug 77
6,195
1,013
4,405
5,806
India
Oct 77
4,886
1,006
2,778
4,395
Brazil
Sep 77
-8.2
13.3 4.7
Iran
Nov 77
11,511
208
9,124
11,561
India
Mar 77
-0.9
9.6 17.9
South Korea
Oct 77
4,246
602
2,586
3,656
Iran
Oct 77
0
34.1 10.3
Mexico
Mar 76
1,501
695
1,479
1,533
South Korea
77 II
1.4
8.7 8.4
Nigeria
Oct 77
4,551
148
5,635
4,495
Nigeria
May 76
-0.1
27.3 12.3
Taiwan
Aug 77
1,416
531
1,586
1,331
Taiwan
Aug 77
-0.3
11.8 5.3
Thailand
Nov 77
1,864
978
1,893
1,992
Thailand
Dec 76
2.0
13.3 13.1
Approved For Release 2002/01/3Q_:,clA-RDP79TO1316A000900040003-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
Latest 3 Months
Percent Change from
3 Months 1 Year
Latest Period Earlier' Earlier 1977 1976 Change
Oct 77 Exports
-47.6
5.0
10,172
8,119
25.3%
Oct 77 Imports
11.6
-4.4
9,990
10,250
-2.5%
Oct 77 Balance
182
-2,131
2,313
Aug 77 Exports
-64.0
5.0
3,949
3,355
17.7%
Aug 77 Imports
28.4
7.3
3,258
2,946
10.6%
Aug 77 Balance
691
410
281
Iran
Oct 77 Exports
57.9
2.6
19,764
18,820
5.0%
Sep 77 Imports
2.8
20.3
9,479
8,770
8.1%
Sep 77 Balance
8,209
7,971
238
South Korea
Oct 77 Exports
-6.2
20.2
7,831
6,217
26.0%
Oct 77 Imports
-9.9
22.0
7,897
6,461
22.2%
Oct 77 Balance
- 66
-244
178
Mexico
Oct 77 Exports
-29.0
34.3
3,367
2,573
30.9%
Oct 77 Imports
70.1
8.3
4,189
4,838
-13.4%
Oct 77 Balance
-822
-2,266
1,443
Nigeria
Sep 77 Exports
-18.9
14.6
3,638
2,940
23.7%
Dec 76 Imports
86.7
8.4
2,531
1,990
27.2%
Dec 76 Balance
1,502
1,102
399
Taiwan
Sep 77 Exports
28.7
9.0
6,637
5,902
12.5%
Sep 77 Imports
-13.9
6.1
5,722
5,111
11.9%
Sep 77 Balance
915
790
125
Thailand
Aug 77 Exports
-17.5
26.8
2,395
1,911
25.3%
Sep 77 Imports
32.3
36.6
3,077
2,384
29.1%
Aug 77 Balance
-322
-190
-132
Approved For Release 2002/01/30 : Chap,.l DP79T01316A000900040003-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
WHEAT
$ PER BUSHEL
27 DEC 0.5066
14 DEC 0.4849
NOV 77 0.4904
DEC 76 0.7416
COFFEE /TEA
$ PER METRIC TON
.~-....,...,?,-...,.a:,,....
400
C PER POUN
D
_ _ ...
TEA
=2,000
London Auction
COFFEE
Other Miids Arabicas,
ex-dock New York
17 OCT
102.3
27 DEC
200.33
10 OCT
96.9
14 DEC
205.86
NOV 77
NA
NOV 77
196.44
DEC 76
77.0
DEC 76
207.11
27 DEC 7.95
14 DEC 8.22
NOV 77 6.66
DEC 76 7.64
Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
A-16
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
37.5 $ PER HUNDRED WEIGHT
No. 2 Medium Grain, 4% Brokens,
f.o.b. mills, Houston, Tex.
30.0 r%
5 DEC
23.25
4I4 Percent Bulk, f.o.b. Decatur
27 DEC
168.00
28 NOV
23.25
14 DEC
155.50
NOV 77
21.31
NOV 77
163.40
DEC 76
13.06
DEC 76
196.22
1973
COCOA1
1974
1975
22 NOV
16 NOV
OCT 77
1976
NA
NA
NA
NOV 76
150.51
1-5DECI
1977
$ PER METRIC TON 0.5 $ PER POUND
7,000
300.
200
10
100
1973 1974 1975
SOYBEAN OIL
Crude, Tank Cars, f.o.b. Decatur
27 DEC 0.2350
14 DEC 0.2475
NOV 77 0.1948
DEC 76 0.1960
1The chart on Cocoa prices will be deleted because the data are not available.
NOTE: The food index is compiled by the Economist for 16 food commodities
which enter international trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
Approved For Release 2002/01/30 A_q X-RDP79T01316A000900040003-5
SOYBEAN MEAL
$ PER TON
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 0 PER POUND
23 DEC
14 DEC
NOV 77
DEC 76
LEAD
45 9 PER POUND
58.1 16,.3.6
57.6 63i 6
53.6 +>{?0
58.6
2,500 35
$ PER METRIC TON150
1973 1974
1-23 DECI
,
1975
1976
1977
10
LME
US
PER METRIC TON
650 C PER POUND
2
000
23 DEC
24.5
i05
,
14 DEC
24.7
31.0
550
NOV 77
23.7
31.2
DEC 76
29.1
31.1)
1,500
C3 i8.4
585.0
12,000
0 1-23 DECI
1973 1974 1975 1976 1977 0 150
125
100
23 DEC
14 DEC
NOV 77
DEC 76
30.8 3 ,3.0
31.7 :13.0
28.6 :1:3
21.6 73 0
$ PER METRIC: TON
1,000
1-23 DEC I
$ PER METRIC TON
Us 14,000
1-23 DECI 4,000
1977
1-23 DEC
1973 1974 1975 1976 1977
Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
A-18
1-22 DECI
1
000
 Approved For Release 2002/01/30 : CIA-RDP79TO1316A000900040003-5
ALUMINUM
Major US Producer
it per pound
53.00
44.00
48.00
41.00
US STEEL
Composite
$ per long ton
359.36
316.36
333.78
306.72
IRON ORE
Non-Bessemer Old Range
$ per long ton
21.43
19.50
20.51
18.75
CHROME ORE
Russian, Metallurgical Grade
$ p.er metric ton
150.00
150.00
150.00
150.00
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
58.50
39.00
42.00
44.50
FERROCHROME
US Producer, 66-70 Percent
t per pound
41.00
45.00
43.00
52.00
NICKEL
Composite US Producer
$ per pound
2.07
2.20
2.41
2.20
MANGANESE ORE
48 Percent Mn
$ per long ton
72.24
72.00
72.00
67.20
TUNGSTEN ORE
Contained Metal
$ per metric ton
21,564.00
13,954.00
18, 352.00
10,960.00
MERCURY
NY
$ per 76 pound flask
123.00
110.00
134.50
120.00
SILVER
LME Cash
t per troy ounce
467.96
478.82
434.62
408.93
GOLD
London Afternoon Fixing Price $ per troy ounce
159.82
125.71
133.79
139.30
RUBBER
60 G PER POUND
300
250
LUMBER INDEX6
1Approximates world market price frequently used by major
world producers and traders, although only small quantities of
these metals are actually traded on the LME.
2Producers' price, covers most primary metals sold in the US.
3As of 1 Dec 75, US tin price quoted is "Tin NY lb composite."
4Quoted on New York market.
5S-type styrene, US export price.
6 This index is compiled by using the average of 13 types of lumber whose
prices are regarded as bellwethers of US lumber construction costs.
7Composite price for Chicago, Philadelphia, and Pittsburgh.
NOTE: The industrial materials index is compiled by the Economist for 19 raw
materials which enter international trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
Approved For Release 2002/01/30A_ 1 lA-RDP79TO1316A000900040003-5
 4O pprve 3-5
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CAT
4
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5
IMP
I/WE
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
Remarks :
8. PPG/R&D -
Please annotate each paragraph as follows:
1. Classification (including unclassified).
2. If possible, underline classified material
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