1.1MB - Pirelli

Worldwide sale of goods: annual growth
in volume (%).
Kingdom should report a higher decline; for Italy, expectations are for growth of not more
than 1.5 percent, as in 1998.
Europe opened the year 1999 with a new and a no less demanding horizon: to proceed
until the single currency achieves full success according to the established plan and to
favor the integration of the economies and sustain the growth according to the
commitments assumed under the Stability Pact.
At the same time, the goal of augmenting the competitiveness of European corporations,
and the Union as a whole, will be vigorously pursued.
The corporations, in particular, will have to implement the changes needed to gain an edge
over the competition which is becoming ever-more widespread within the Union and
increasingly fiercer in other economic areas.
Governments are called upon to complete the liberalization of the markets for products,
services, employment and the professions from which impetus could arise to create new
activities.
According to recent indications by the European Central Bank, the State’s presence in the
economy of Euroland is equal to 49 percent of GDP, compared to 35 percent in the United
States and 39 percent in Japan. The public presence in its various forms and restrictions
which fall upon citizens and corporations alike needs to be reduced to encourage new
business initiatives and new employment opportunities and raise the level of the Union’s
competitiveness.
In Europe, there is a very strong need to increase economic growth, also to render
integration easier. The low interest rate policy practiced by the European Central Bank is
not enough; besides liberalization, as mentioned before, important infrastructure projects
have to be launched to sustain investments and employment, also through the use of new
forms of financing.
Inflation should remain at 1-1.5 percent throughout most of the euro countries, one of the goals
of the European Central Bank, and similar to the figure for the European Union as a whole.
In Central Europe, Hungary and Poland should post growth of around 4 percent in 1999,
Slovakia somewhat lower figures, and for the Czech Republic, lastly, forecasts are for a
stagnant economy.
The outlook for the United States is for a continuation, although at a slower pace, of the
positive performance seen in 1998. The GDP should again exceed 3 percent, with inflation
around 2 percent.
The forecasts for Asia are not favorable. In Japan, another moderate falloff in GDP
is expected (-1 percent) after the significant drop of 1998. The recently approved fiscal
package should aid in creating a positive turnaround during the course of the year, but
there still remain queries over the widespread financial imbalances. India should post a
growth of around 5 percent like in 1998. China, which is forecast to register growth of
roughly 7 percent, is being affected by the instability of the financial institutions and the
difficulties in shoring up the exchange rate against a slowdown in exports. As far as the
other Southeast Asian countries are concerned, any possible economic improvements
after the 1997-1998 crisis are in any case influenced by unstable political-social
scenarios.
In South America, the crisis in Brazil is producing its effects on the other South American
countries, especially Argentina. Expectations for Brazil are directed to a substantial drop
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