ECONOMIC INTELLIGENCE WEEKLY REVIEW 2 MARCH 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01316A001000010011-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 54
• Document Creation Date: December 12, 2016
• Document Release Date: January 9, 2002
• Sequence Number: 11
• Publication Date: March 2, 1978
• Content Type: REPORT

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Economic Intelligence
Weekly Review
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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REL. . . - This Information has been Authorized for
Release to ...
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of E.O. 11652, exemption category:
?5B(1), (2), and (3)
Automatically declassified on:
data impossible to determine
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 25X6
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SECRET
NOFORN
France: Economy on Eve of Parliamentary Elections .................... 1
Prime Minister Barre's center-right government has stuck to its economic
stabilization program despite the political liability of high unemployment
and flat real wages.
USSR: Hard Currency Position Improving ............................ 4
The hard currency deficit has been trimmed from the record $6.3 billion
of 1975 to $5.5 billion in 1976 and $4 billion in 1977, with a further cut in
prospect for this year.
Gold: Continuing Price Rises Anticipated ............................. 7
Fears of further inflation, depreciation of the US dollar, and heavy
speculative buying have rekindled interest in gold as an alternative asset.
Poland: Dealing With an Overcommitted Economy in 1978 ............. 12
The recently released 1978 plan reflects the efforts of Gierek and
company to deal with the apparently irreconcilable demands of Polish
workers and Western creditors.
China: More Emphasis on Civil Aviation ............................. 15
Peking has been buying modern Western aircraft, upgrading its airports,
and expanding its domestic and international routes.
Yugoslavia: Regional Rivalries and a Stop-Go Economy ................ 21
This special article provides perspective on (a) the cyclical pattern of
expansion and contraction In the Yugoslav economy and (b) key econom-
ic aspects of the deep-rooted regional animosities.
Publication of Interest, Statistics
i
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SECRET
NOFORN
FRANCE: ECONOMY ON EVE OF PARLIAMENTARY ELECTIONS
Prime Minister Barre's center-right government has stuck to its economic
stabilization program during the run-up to the March National Assembly elections
despite the political liability of high unemployment and flat real wages. Moreover, the
governing parties have pledged to keep the stabilization program basically intact for
another two years if returned to office. In contrast, the leftist parties promise sharp
increases in government transfer payments and the minimum wage as well as a wave
of nationalizations. The leftist program has egalitarian appeal but would stimulate
inflationary pressure and discourage private investmentment.
Barre's Economic Strategy ...
Raymond Barre, a distinguished economist, was appointed Prime Minister in
August 1976 precisely to deal with France's mounting economic difficulties. Though
not unique to France, the set of problems he faced was complex. In particular,
? Economic recovery clearly was running out of gas, after a strong start in
late 1975.
? Unemployment remained at more than twice the prerecession level and
showed no signs of dropping.
? Inflation, which had gradually slowed to a 10-percent annual rate, was
beginning to accelerate again.
? The current account balance, after showing a small surplus in 1975, was
headed for a record $6 billion deficit in 1976.
Barre immediately made clear his belief that a multiyear stabilization pro-
gram-modeled after the West German example-was required. The Barre Plan,
Note: Comments and queries regarding the Economic Intelligence Weekly Review
are welcome. For the text, they may be directed to of the
Office of Economic Research, tele hone Ifor the Economic Indicators, to 25X1 A
If OER, telephone
25X1A
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announced a few weeks later, aimed at slowing inflation to a 6.5-percent annual rate
by the end of 1977 and sharply reducing the trade deficit. These objectives were to be
accomplished by returning the budget to balance, curtailing the growth of money and
credit- and holding real wage increases for most workers near zero. In art effort to halt
the inflationary spiral quickly. Paris froze prices for three months and reduced the
value-added tax on most consumer goods.
The Prime Minister has stuck closely to his original plan despite calls from both
left and Right for expansionary measures. fie has adjusted course by introducing
from time to time selective measures aimed at particular problems. For example,
Barre has okayed fiscal incentives to encourage the hiring of youths and special
programs to aid particularly hard hit industries such as steel.
...Xnd Its Effects: the Economic Situation at Election Time
The principal cost of the Barre Plan both economically and politically has been
sluggish growth. In 1977, GNP increased no more than 3 percent, markedly less than
the 4.3 percent originally projected. Industrial production has fared even worse,
stagnating since the Barre Plan went into effect.
!low growth has worsened uncmploytnent. Given the present structure of output,
France needs annual GNP gains of 4 percent simply to hold unemployment steady in
the face of productivity gains and accelerated labor force growth. Unemployment, at
4.5 percent, is still running at more than double the prerccession rate, although it has
declined from the August peak- of' 5.6 percent.
1976
1977
Current
Government
Scenario
Moderate
Left
Scenario
Real GNP growth ............................
5.2
:3 0 `
3.6
4.1
Average unemployment ..................
4.3
4.9
5.5
3.1
Consumer price inflation' ...........
9.9
9.V
8.5
12
Billion US $
Projec ted.
Prelitninarv .
December to December.
SECRET 2 March 1978
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Slowdowns in wage increases and money supply growth were offset by rises in
food and imported raw material prices through much of 1977. Monthly inflation rates
dropped substantially only in November and December. Over the year, consumer
prices rose 9.0 percent.
The balance of payments has improved steadily. France ran a $5.9 billion current
account deficit in 1976, of which $4.1 billion was in merchandise trade. In 1977, the
current account deficit fell to $3.1 billion, the trade deficit to $2.3 billion. Merchan-
dise exports increased 14 percent in value while imports were up only 10 percent.
Much of the gain came in trade with other major European countries and OPEC
member states. A slight decline in net oil imports played a role.
Political Impact: Probably Negative
Barre's main economic success, improvement in the trade balance, is of little
interest to voters. They also are skeptical about the progress against inflation, partly
because it occurred so recently and partly because many believe that the government
has manipulated the data for political purposes. The Left is not alone in expressing
impatience with slow economic growth. The French employers association, the
Patronat, is calling for measures to improve the investment climate and foster 5-
percent growth in 1978.
In the election campaign, Barre is arguing that long-run economic stability would
suffer if Paris pushed for a resumption of rapid economic growth before inflation and
the trade deficit were brought under control. He feels that the fruits of his stabilization
policy will be fully evident in about two more years. Barre charges that implementa-
tion of the Communist-Socialist common program would destabilize the economy
within six months. He stresses that the leftist package-which includes nationaliza-
tions, minimum wage hikes, and a jump in government spending-would discourage
investment and spur inflation.
To quantify the outlook, we made two projections using the CIA econometric
model of the French economy. The first projection was based on a current
government scenario, the second on a moderate Left scenario. The current
government scenario assumes that present government policies will be continued
through 1978. It incorporates a 12-percent increase in government spending, a small
rise in the minimum wage, and some relaxation of monetary policy. The moderate
Left scenario allows for a 35-percent increase in government spending and a 35-
percent jump in the minimum wage.
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If the Current Government Wins ...
If the current governing parties win at the polls, the emphasis on inflation and the
trade balance will continue. The budget deficit would be about $1.8 billion on total
outlays of $81 billion.
According to our estimate, real GNP growth would rise only slightly in 1978, to
about 31/2 percent. Overall demand would remain sluggish, with some strength coming
from income tax relief to individuals and firms. Inflation should slow to about 8.5
percent, on a December-to-December basis. Unemployment would rise in first half
1978 but might decline slightly in the second half. Exports should continue to rise
moderately, prospects being best for foodstuffs, automobiles, and capital goods. With
sluggish consumer demand holding down imports, France should be able to cut the
current account deficit another $1 billion, to about $2 billion.
If the Left Wins ...
If the Left wins power in March and is able to put together a viable government,
it probably will carry out its pledges to boost government transfers, hike the minimum
wage, and nationalize leading business firms. The Left expects to raise government
spending to nearly $100 billion in 1978 and sees the budget deficit rising to $8 billion.
Expansionary moves by Paris would be partly offset by increased reluctance of
businessmen to invest or hire.
The policies expected under moderate Left leadership would accelerate inflation
and increase the trade deficit. We estimate that consumer prices would rise by at least
12 percent in 1978 under the influence of large increases in wages, government
spending, and the money supply. The current account deficit would rise to about $4
billion. These aggravated financial problems would make gains in growth of
production and employment even more difficult to achieve in subsequent years.
(Confidential)
USSR: HARD CURRENCY POSITION IMPROVING
By pushing exports and holding down imports, the USSR has trimmed its hard
currency trade deficit from the record $6.3 billion of 1975 to $5.5 billion in 1976 and
$4 billion in 1977. With a cut in machinery imports in prospect, the deficit should be
further lowered this year. The systematic reduction in the hard currency deficit has
enabled Moscow to get better terms on new credits from Western banks.
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Cutting Trade Deficits
The record Soviet hard currency deficit in 1975-caused in large part by the
Western recession, which hit Soviet exports, and a harvest failure, which led to
massive imports of Western grain-hurt Moscow's creditworthiness. For the first time
the USSR borrowed heavily in the Eurodollar market (more than $4 billion), doubling
its hard currency debt to $10 billion. This borrowing put some major Western banks
close to their legal or self-imposed lending limits vis-a-vis the USSR, and they started
to demand higher interest rates from Moscow.
The USSR began to reduce its hard currency trade deficit in 1976, cutting it to
$5.5 billion by boosting oil exports. We believe the $1.4 billion increase in oil exports
was made possible by a reduction in oil stocks and cutbacks in domestic consumption.
In 1977, the Soviets did even better, slicing the deficit to roughly $4 billion by
keeping imports at about the 1976 level and expanding exports by 10 to 15 percent.
Despite large orders for Western grain, we estimate that Soviet hard currency grain
imports fell from a record high of $2.6 billion in 1976 to about $2.0 billion. The drop
in grain imports was offset by an increase in machinery and equipment imports.
USSR: Hard Currency Balance of Payments
1974 1975 1976 1977
Million US $
Trade balance .......................................................... -996 -6,335 -5,516 -4,000
Exports, f.o.b . ...................................................... 7,436 7,794 9,712 11,000
Imports, f.o.b . ...................................................... 8,432 14,129 15,228 15,000
Gold sales ................................................................ 683 1,0002 1,361 1,300
Invisibles and other hard currency trades .......... 1,601 902 929 1,230
Current account balance ...................................... 1,288 -4,433 - 3,226 -1,470
Net credits .... 820 5,000
4,000 2,000
Capital account balance ...................................... 2,108 567 774 530
Net errors and omissions ........................................ -2,108 -567 -774 -530
Net debt (yearend) .................................................. 5,000 10,000 14,000 16,000
Percent
Debt-service ratio' .................................................. 15 22 27 28
' Estimated.
2 Includes a rumored $250 million sale to Middle East parties.
s Includes estimated receipts from arms sales, known hard currency trade under clearing agreements, net
receipts from tourism and transportation, and net interest payments on hard currency debt.
Principal repayments on medium- and long-term debt and interest payments on total net debt as a share of
merchandise exports.
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Soviet exports generally benefited from rising world prices rather than from
substantial increases in volume. Average annual prices were higher for oil and other
Soviet export commodities such as diamonds, timber, and platinum-group metals.
Soviet natural gas exports jumped from $346 million in 1976 to $600 million in 1977,
mainly because of increased volume.
Moscow.i.'s hard currency earnings from other sources-arias sales, tourism, and
transportation services-have risen at an annual rate of roughly 30 percent over the
past two years. Shipments of military equipment probably reached $1.4 billion to $1.8
billion last year, up from $1.2 billion in 1976, because of large deliveries to Algeria,
Iran, Iraq, Libya, and Syria. Net receipts from tourism and transportation probably hit
$800 million in 1977, a rise of $200 million from the 1976 level.
Reducing Growth in Debt
Moscow has sharply curtailed the growth in its hard currency net borrowing over
the past two years, from $5 billion in 1975 to $4 billion in 19-6 and $2 billion in 1977.
By yearend 1977, hard currency debt to the West stood at $16 billion.
Moscow also has sought to reduce its reliance on Western banks in an effort to
counter adverse publicity on the size of its debt and to avoid paying what it considered
unacceptable interest rates on further bank loans. Steps taken over the past two years
to minimize the need for Western batik funds have included:
Increased use of direct government loans and government-guaranteed
supplier credits to finance a major part of machinery, equipment, and pipe
imports from the West,
? Postponement of payments to suppliers in 1976 and 19,77 for periods of up
to one year to conserve cash.
? A step-up in gold sales, which produced a record $1.36 billion in 1976 and
remained about the same in 1977.
In the meantime, the Soviets arranged only one $250 million syndicated Eurodollar
loan in 1976-77, compared with three syndicated loans totaling $750 million in 1975.
The Soviet hard currency trade deficit is likely to be reduced further in 1978; the
hard currency current account may be in the black for the first time since 1974.
Because repayments on past loans are catching up to new drawings, the growth in
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debt should be further slowed this year. Imports of Western grain should rise to about
$2.2 billion (1977 prices), or higher if grain prices increase or if the Soviet harvest is no
better than in 1977. Imports of machinery and equipment are expected to decline by
more than the increase in grain deliveries because of the large drop last year in
machinery orders.
With a slightly improved economic outlook for the West in 1978, we expect
Soviet non-oil exports to grow about as much as in 1977. The volume of hard currency
oil exports may very well decline, however, after rising substantially in 1976 and
remaining at a high level last year. Increased oil exports in 1976 were made possible
by restrictions on the growth of domestic oil consumption and the drawing down of
fuel stocks. Regional shortages of gasoline and diesel fuel were reported. With growth
in oil output beginning to slow in 1977, fuel shortages persisted even though oil exports
to the West were not appreciably increased. A further slowing in the growth of oil
production appears almost certain this year. Oil exports to the West thus may decline
unless Moscow is willing to pay the cost of further economies in domestic oil
consumption. A reduction in oil exports to Eastern Europe would be politically
unpalatable.
Moscow should not experience any difficulty in meeting its financial obligations
in 1978, which include about $3.5 billion in debt service. Unused lines of direct
government and government-guaranteed credits will cover a large part of Soviet
machinery, equipment, and pipe imports from the West. Furthermore, the USSR
apparently is about to line up a $300 million syndicated Eurocurrency loan-its first
since July 1976-at an interest rate spread of only three-fourths of a percentage point
over the London interbank rate.
The level of Soviet gold sales in 1978 will depend on Moscow's success in cutting
the trade deficit, gold market conditions, and the cost and availability of Western
bank credits. Given current excess liquidity in the Eurocurrency market, the high and
rising price of gold, and the continued reduction in the Soviet hard currency trade
deficit, Moscow's external financial position will be greatly strengthened. (Secret
Noforn)
From a low of just over $100 a troy ounce in August 1976, the price of gold
surged to more than $180 a troy ounce in late February, despite historically high gold
supplies. Fears of inflation, depreciation of the US dollar, and heavy speculative
buying have rekindled interest in gold as an alternative asset.
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With the amended IMF articles on gold scheduled to become effective within the
next three months, the Group of 10 * along with Switzerland and Portugal did not
renew the transitional gold agreement. Under the transitional agreement, which ran
from August 1975 through 1 February 1978, central banks could not (a) increase their
total monetary gold reserve holdings or (b) peg the free market price of gold. Until the
new IMF articles are ratified by 60 percent of the members with a combined 80
percent of the votes, central banks will still operate under the original IMF articles,
which prohibit buying gold above the official price of 35 SDRs a troy ounce.
When ratified, the amended IMF articles will allow central banks to buy and sell
gold at the market price. Central banks will be allowed to bid in their own names at
IMF auctions and to trade gold among themselves at mutually agreed prices. The
amended IMF articles will also abolish the official price for gold and replace gold with
SDRs as the numeraire for the international monetary system.
The prospect of liberalized IMF gold trading rules has focused the spotlight on
gold markets. Traders hope for an expanded monetary role for gold as central banks
come to view freed gold reserves as an important asset available for financing balance-
of-payments deficits. In practice. we do not anticipate that central bank actions will
change significantly under the new rules.
Speculative Demand Doubles
The amount of gold absorbed by speculative demand nearly doubled in 1977.
Inflation fears accompanying US dollar weakness in international currency markets
have been an important element behind the increase in gold demand for hoarding.
Against the currencies of Japan, the United Kingdom, West Germany, and Switzer-
land, the US dollar fell in value by an average of 12 percent in fourth quarter 1977.
During the same period, the pace of inflation rose in the United States while
continuing to slacken in Japan, West Germany. the United Kingdom, and Switzerland.
Estimates of future rates of inflation are sufficiently uncertain to make gold an
attrariive aceet.
Gold markets broadened last year with large quantities of gold sold as coins.
Nearly 40 percent of South African gold production in January of this year was
marketed in the form of Krugerrands.** Record-breaking Krugerrand sales, especially
in the US market, represent a new variable in the speculative demand equation.
* Belgium, Canada, France, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the United States, and West
Germany.
** A Krugerrond is a ore-ounce, 22-carat gold South African coin.
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Commercial Demand Remains High
Despite sharply higher dollar prices, commercial use of gold increased by nearly
5 percent in 1977. Industrial demand remained high as buyers rebuilt inventories in
anticipation of higher prices. Most industrial gold is used in jewelry, which is often
held privately as a store of wealth. Middle Eastern private gold purchases and
traditionally price-inelastic uses such as in dentistry were largely unaffected by
increasing dollar prices.
The surprisingly strong commercial demand for gold is partly explained by large
exchange rate movements. Compared with a 32-percent rise in the dollar price of gold
in the last 12 months, gold prices rose only 11 percent in yen, 12 percent in deutsche
marks, and 16 percent in sterling. Measured in Swiss francs, gold prices fell by more
than 4 percent. For holders of strong currencies, relative gold prices have not reached
levels that might trigger a reduction in commercial demand.
Free Market Gold Supply and Consumption '
1974
1975
Tons
1976
19772
Supply ..............................................
1,146
1,030
1,362
1,595
Free world production ................
983
939
940
930
South Africa ............................
759
707
708
700
Other ........................................
224
232
232
230
Communist sales ..........................
205
136
364
320
USSR ........................................
131
146
328
300
74
-10
36
20
Sales from monetary stocks ........
- 42
- 45
58
345
Central banks ..........................
-42
-45
- 63
155
IMF ..........................................
0
0
120
190
Commercial use ..............................
453
724
1,145
1,197
Jewelry ..........................................
230
531
883
908
Developed nations ..................
292
323
448
473
Developing nations ..................
-62
2
208
435
435
Electronics ....................................
96
65
75
84
Dentistry ......................................
62
65
72
75
Medals ..........................................
6
16
47
47
Other ............................................
59
47
68
83
Available for hoarding ..................
693
306
217
398
Change in US dollar price' ..........
72.7
-24.4
-4.0
20.0
Data for commercial use are taken from industry sources.
2 Data for 1977 are estimated.
2 Represents gold jewelry that was melted down and sold for other uses.
Yearend over yearend.
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National Currency Units
11 111 IV I II III IV I 11 111 IV 1 11 111 IV I II III IV Jan Feb 21
1.973 1974 1975 1978 1977
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Supply Augmentation
In 1977 the Free World gold supply rose by more than 17 percent from its
already high 1976 level; the extra gold has come largely from the IMF and several
central banks. The IMF gold auctions put 120 tons on the market in 1976 and another
190 tons in 1977. We estimate about 155 tons was sold by central banks; not all gold
sales by central banks can be traced back to their source because of the extensive use
of middlemen. The largest sale was 70 tons by Portugal. Some less developed countries
are also known to have sold gold on the open market.
Soviet gold sales in the last two years were double the annual level of the early
1970s. Balance-of-payments problems have to a large extent caused the Soviets to alter
their marketing plans. Other Communist countries were small net sellers in the last
two years. Total Communist sales accounted for 20 percent of the gold offered in the
Free World in 1977.
Prospects for 1978
The demand for gold in 1978 looks strong.
? Barring a turnaround in the US dollar's relative strength in exchange
markets, gold will be an attractive nondollar asset.
? Political uncertainties in Italy and France-countries with extensive gold
holdings-could add to speculative purchases.
? The psychological effect of central banks' becoming potential buyers will
bolster speculative demand.
The supply of gold to the free market will likely remain steady or fall slightly this
year. Free World gold production should be near last year's volume. South African
mines are currently operating with a full complement of workers; so far, racial strife
has not affected the mining compounds. Despite continued low capital inflows, South
African balance-of-payments problems are not expected to be severe enough to force
Pretoria to sell gold from government stocks. IMF sales of monetary stocks will
continue through 1978-79 at roughly 195 tons a year. Soviet sales should not be larger
this year than in 1977 and may be less.
Market participants expect the price of gold to reach $200 a troy ounce this year.
The prospect of higher prices will add to the instability of gold markets and
accentuate temporary price swings. (Secret)
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Poland's recently released 1978 economic plan reflects regime efforts to deal with
the conflicting, apparently irreconcilable, demands of Polish workers and of Western
creditors. The plan calls for a further shift of priorities in favor of the consumer and a
slowdown in the growth of industrial output it also sets the stage for a second year of
no growth of imports from the West. Achievement of these objectives will neither
eliminate the severe shortages of quality foods, especially meats, nor solve Poland's
hard currency problem, but it is probably the most Poland can do in the short term,
given its severe political and economic constraints.
On the consumer front, the government will hold its breath, hoping serious
popular disturbances will be avoided until livestock herds can be rebuilt and the
output of consumer industries expanded. On the foreign exchange front, the planned
9-percent growth of exports to the West, coupled with no growth of imports, would
reduce the trade deficit to a level Poland could conceivably finance for the remainder
of 1978, but more drastic measures to balance trade will be necessary over the next
year or so unless large-scale debt rescheduling is obtained. Meanwhile, further cuts in
imports will constrain both economic growth and consumer programs.
Background
Poland's current economic problems stern from policies initiated in 1970, which
simultaneously aimed at rapid industrial modernization and a sharp rise in living
standards. To help achieve these goals, Poland imported massive amounts of Western
technology and equipment on the cuff and permitted sizable increases in income and
consumption. Initially successful, these policies began to founder by 1974.
? Exports to the West could not keep pace with rapidly rising imports,
creating a hard currency debt, which totaled an estimated $13 billion at
yearend 1977, compared with $4 billion at yearend 1974.
? Poor grain and fodder crops forced Poland to import above-plan amounts
of Western grain and set back livestock and meat consumption programs.
? Worker income continued to climb. while the availability of consumer
goods increased slowly, creating serious shortages of meat and quality goods.
? In response to mounting consumer unrest, the regime froze prices of meat
and other basic foods and boosted food subsidies to cover increased
production costs.
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? An effort in 1976 to hike meat prices by roughly 70 percent provoked
violent worker reaction, which forced the regime to back down.
Facing Up to the Problems: Mixed Results
Over the past year or so, the regime has candidly discussed Poland's economic
problems and what to do about them, Gierek has made the hard decision to cut
imports from the West as the key to coping with the growing foreign debt. On the
other hand, he has been unwilling to risk worker discontent by dealing firmly with
food prices and income policies. Plans to curtail the growth of household income last
year were undermined by uncontrolled increases in bonuses, pensions, and overtime.
Gierek put the population on notice at last month's National Party Conference
that food prices would rise, but only gradually, and would be linked to increased
agricultural output. To date, however, food prices remain frozen while money wages
continue to grow, further intensifying the chronic shortages.
The 1978 Economic Plan: More for, the Consumer
The 1978 economic plan calls for national income to grow at only 5.4 percent this
year compared with the original five-year plan target of 7 percent per year; industrial
production is to increase only 6.8 percent in 1978 compared with the 1976-80 goal of
8.5 percent per year. The plan further shifts emphasis toward the consumer at the
expense of heavy industry, thereby reaffirming the change in growth targets begun in
December 1976. Production of consumer goods-as well as products with established
export markets-is to grow twice as fast as production of capital goods destined for the
domestic market. The supply of services and housing construction also are to grow
faster in 1978 than called for in last year's plan. Agriculture also continues to receive a
high priority; production is slated to increase 6.7 percent in an apparent attempt to
make up for the stagnation in 1976-77.
The rate of growth in agricultural output would be obtainable only with
exceptional luck with the weather, Short of a major expansion of feedgrain and fodder
output, the regime can do little in the near term to eliminate meat shortages. In
keeping with the 1980 goal of rebuilding livestock inventories, the regime is offering
only a small increase in meat supplies this year, Gierek hopes he can convince the
Poles to wait for increased consumption until the herds have been rebuilt. Meanwhile,
the 2-percent increase in meat supplies targeted for this year will leave per capita
consumption below the peak 1975-76 levels, thus doing little to allay consumer
resentment.
2 March 1978 SECRET
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Balance-of-payments stringencies preclude the regime from relying more on
foreign trade to alleviate the consumer's plight. Warsaw already is spending heavily to
import grain and fodder to support the livestock program. Substantial sums also have
been spent on meat imports, while meat exports have been slashed to bolster domestic
supplies.
Foreign Trade Prospects
Warsaw must spur exports to the West to ease the pressure on its balance of
payments. The revised 1976-80 plan, which called for a 15-percent annual growth rate
(in constant prices) for exports, was unattainable and has been abandoned in practice.
The 1978 plan projects a rise of 9.2 percent, a much more realistic goal in light of the
present depressed market for traditional Polish exports and the obstacles faced in
penetrating new Western markets. Last year, exports to the West increased 9.9
percent.
Meanwhile the regime has cut imports from the West in an effort to reduce the
chronic trade deficits. Last year, imports fell 4 percent with substantially sharper cuts
in imports of machinery, equipment, and certain industrial materials. Some plants
have recently missed production targets because of the cut in imports of essential
industrial materials. Warsaw nonetheless hopes to contain 1978 import volume at last
year's level and appears ready to accept the further consequences for industrial
production. Plants now under construction, for example, will be commissioned later
than scheduled because of stretchouts in deliveries of equipment.
The targets of the 1978 trade plan are probably attainable. But continuation of
1977-78 import and export trends will not solve Poland's serious hard currency debt
problem. If Poland increases hard currency exports by 9 percent annually while
keeping imports constant, the trade deficit in 1980 would still amount to roughly $1.6
billion-half the record deficit of $3.3 billion set in 1976. In addition, servicing a debt
that would reach $20 billion in 1980 would about equal total export earnings. Warsaw
could not finance such foreign exchange requirements in the West without obtaining
massive direct aid or debt rescheduling. The alternative course of sharply cutting
imports would have severe domestic repercussions. Industrial production, including
production of consumer goods, would be hard hit and real incomes might decline, an
eventuality the government cannot risk because of the fear of popular reaction.
(Confidential Noforn)
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SECRET
CHINA: MORE EMPHASIS ON CIVIL AVIATION
As part of the general push to modernize the economy, Peking is expanding and
polishing up its domestic and international air service. The policy, unveiled in the
early 1970s after two decades of neglect, has gained momentum in the past three
years. Highlights are fleet modernization, improved service, and upgraded airport
facilities. The Civil Aviation Administration of China (CAAC), the Chinese national
airline, has focused on expansion of the sparse domestic network while adding
selectively to its limited international routes. Concurrently, the number of foreign
airlines providing service to China has sharply increased.
Civil aviation in China began with the inauguration of service between Shanghai
and Hankow in 1929. In the next decade, a thin network was developed, including a
few short international links. Operations were brought largely to a standstill by World
War II and China's civil war. Substantial aid from the USSR in the 1950s-mostly in
the form of aircraft and maintenance facilities-allowed the new Communist
government to begin restoring some services. Two airlines were established, the
Soviet-Chinese Joint Stock Company for Aviation (SKOGA) and the Chinese-owned
China People's Aviation Company.
The two companies were integrated in 1953 and within a year were merged to
form a single airline, the CAAC, owned and controlled solely by the PRC. Throughout
the 1960s, when China turned inward to solve pressing domestic problems, Peking
paid little attention to civil aviation. As a result, the mainland was served by a
rudimentary domestic network and was almost completely isolated from the interna-
tional aviation scene.
Program for Fleet Modernization
In the early 1970s Peking, making an about-face in its civil aviation policy, began
an aggressive fleet modernization program and pushed for bilateral civil aviation
agreements, mostly with non-Communist countries. In 1974 it joined the International
Civil Aviation Organization (ICAO). Since 1970, the PRC has spent roughly three-
fourths of a billion dollars for foreign civil aircraft, spare parts, and air control
equipment.
The acquisition of six Soviet long-range jet IL-62s in 1971 was the first step
toward modernization. The Chinese were quick to criticize the IL-62s and began
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looking at new Western aircraft. Despite expressed dissatisfaction with the IL-62s, we
believe the major reasons for the shift to Western suppliers (aside from political
considerations) were a desire to broaden sources of equipment and to add prestige to
the CAAC fleet.
The initial purchase from the N Vest in late 1971 involved six medium-range
British Trident 2Es. Subsequent contracts brought total Trident 2E and 3B orders to
:35 aircraft, of which 20 are assigned to the civil fleet. The next major acquisition of
Western aircraft came when CAAC bought 10 long-range Boeing 707s in mid-1972. In
addition to these purchases, China retains options for three Anglo-French Concordes.
China: Inventory of Jet and Turboprop Aircraft,' March 1978
t ountry of
Manufacture
Dumber
Engines
Passengers
Cargo
(kg)
Range
(km)
Jets ..........................
37
II. 62 (Classic) ....
USSR
6
4
122-186
Trident ..................
UK
21
Model LE ..........
1
3
115~-139
3,400
Model 2E...........
18
3
132-149
4,000-4,700
Model 3B ..........
2
3
158.179
:3,000-3,100
Boeing 707 ......,...
US
10
Model 320B ......
4
4
189
12,800
8.700-10,500
Model 320C....-
6
4
189
43.900
9.700-10.500
Turboprops ..............
48
IL 18 ....................
USSR
11
4
89
6,800
6,400
AN 12 ..................
USSR
2
4
90
4,400-9,500
3,600-7,800
Viscount 810 ........
UK
5
4
52
6,600
2,600
AN 24 ..................
USSR
30
2
50
3,700
2,100
The t:hiuese penchant for multiple suppliers and the earlier reliance on the USSR
have givers CAAC one of the world's most varied civil air fleets, made up of 37 jets, 48
turboprops, and 335 piston aircraft. Because of the fast pace of acquisition. much of
the fleet is underemployed. Nonetheless. Peking continues to express interest in
various aircraft, including the West European :\300 Airbus, the US DC-9. and various
Boeing models.
Expansion of Routes
\s more modern and longer range aircraft were added to the fleet, the
government expanded the small domestic route network and increased international
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service. The new international routes involved both the inauguration of long-haul
service by CAAC and the authorization of additional foreign carrier service to the
mainland.
For more than two decades following establishment of the People's Republic,
CAAC's domestic operations grew fitfully, remaining concentrated in northern and
coastal cities. In the 1970s, the government expanded domestic routes from 80 to more
than 120 and weekly flights from 150 to 350.
The pace of expansion has accelerated in the past three years, as newer jet
aircraft entered domestic operations. One-third of the routes now are served by
Western jets, mostly Tridents. The backbone of domestic operations remains the links
between Peking, Shanghai, and Canton. Long-distance flights between Shanghai and
Ch'eng-tu, Shanghai and Urumchi, and Canton and Ch'eng-tu have been added in the
past year. The new flights are shifting operations southward and reducing the
dominance of Peking.
The groundwork for much of the present expansion of international air service
was laid in the early 1970s, when Chinese delegations traveled the world concluding
bilateral air accords. China now has air agreements with 34 countries, twice the
number in 1970 when most of the pacts involved other Communist countries.
Until 1973, international service was confined largely to the USSR, North Korea,
and North Vietnam; there was a weekly round trip flight to Burma. In the past three
years, CAAC has reached out beyond this regional base and has inaugurated services
stietching from Japan across South Asia to Eastern and Western Europe.
Nine foreign carriers operate scheduled flights to the mainland. In the past four
years the longstanding services of Aeroflot, North Korea's CAAK, Air France, and
Pakistan's PIA have been augmented by new routes flown by Ethiopian Airlines
(EAL), Iranair, Japan's JAL, Romania's Tarom, and Swissair.
These nine airlines each operate at least weekly flights, which connect mainland
China directly to Addis Ababa, Aden, Athens, Bombay, Bucharest, Geneva, Karachi,
Moscow, Osaka, Paris, Rawalpindi, Pyongyang, Tehran, Tokyo, and Zurich. Services
into these cities provide links to more than 100 other airlines.
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Flight Flights
Designation
Itinerary
Per Week
CA 901/902
Peking-Hanoi
1
Trident
CA 903/904
Peking- Pyongyang
I
Trident
CA 905/906
Kunming-Rangonn
I
Trident
CA 907/908
Peking-Moscow
1lyushin 62
CA 921/922
Peking-Shanghai-Osaka-Tokyo
Boeing 707
CA 92:3%924
Peking-Shanghai-Tokyo
1
Boeing 707
CA 931/932
Peking-Karachi-Paris
Boeing 707
CA 941/942
Peking-Tehran-Bucharest-Tirane
I
Boeing 707
CA 951 /952
Peking-Phnom Penh
Biweekly
Boeing 707
Aeroflot (USSR)
SU-571 /572
Moscow-Peking
I
Ilyushin 62
Air France ..............................................
AF-178/179
Paris-Athens-Karachi-Peking-Tokyo
I
Boeing 707
CAAK (North Korea l ............................
KA 151,152
Pyongyang-Peking
Antonov 24
Ethiopian Airlines (EAL) ....................
ET 771/772'
Peking-Bombay-Addis Ababa
Boeing 707 or 7208
ER 773/774'
Peking-Bombay-Aden-Addis Ahabu
I
Boeing 707 or 7208
Iran Air ..................................................
111 800/801
Tehran- Peking-Tokyo
2
Boeing 707
Japan Airlines (JAL) ............................
JL 781/782
Tokyo-Peking
McDonnell Douglas DC 8S
11,785/786
Tokyo-Osaka-Shanghai-Peking
McDonnell Douglas DC-8S
PK 750/751
Karachi-Peking-Tokyo
Boeing 707
PK 752/753
Karachi-Rawalpindi-Peking-Tokyo
I
Boeing 707
Tarom (Romania) ..................................
RO 311,1312
Bucharest-Karachi-Peking
llyushin 62
Swissair ..................................................
SR 316/317
Zurich-Geneva-Athens-Bombay-Peking
1
McDonnell Douglas DC-8S
' These flights are being operated on an intermittent basis because of the Ethiopian-Somalian War.
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China: Major International Air Routes, March 1978
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 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
Airport Improvements
to the past five years, the Chinese have made across-the-board improvements at
their international and domestic airports, extending runways, increasing apron space,
and upgrading air traffic control capabilities. A major renovation of Peking's central
airport is now under way. The existing 3,200-nieter runway is being extended, and a
second runway of 3,200 meters is being built. Improved air traffic control procedures
and a new control tower will enhance air traffic handling capability. Similar work has
been completed or is under way at China's three other international airports,
Shanghai, Canton, and Urumchi. Construction of a major new airport at Ilofci has
been completed, and work on two others, at Tientsin and Harbin, is continuing. The
airports at rlofei and Tientsin are scheduled to provide alternative service to the fields
at Shanghai and Peking, China's major gateway airports.
Over the next few years, new routes will be added to the existing domestic
network, especially in the south and west; and the flight frequency between major
cities will be increased. On the international front, we anticipate expanded JAL and
CAAC services between China and Japan, as well as new flights by Thai International
and CAAC between China and Thailand. New CAAC service to Europe is expected to
include flights to Belgrade and perhaps to Switzerland. CAAC flights to Addis Ababa
are scheduled for this year, perhaps with flights to Senegal or to Dar es Salaam; the
war in the Born of Africa may delay these plans. Inauguration of new foreign airline
service will hinge on Chinese willingness to permit expanded commercial contacts and
tourism.
Peking continues to hold intermittent talks with major US and West European
manufacturers on acquisitions of new aircraft. We see little reason for Peking to
exercise its options on the Concorde except for prestige and perhaps for technological
gain. In general, any major acquisition would seem unnecessary since the current fleet
can readily meet all CAAC requirements over the next few years. (Secret Noforn)
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SECRET
Special Article
YUGOSLAVIA: REGIONAL RIVALRIES AND A STOP-GO ECONOMY
Note: This article presents, in modified form, a recent briefing paper prepared
in the office of Economic Research.
The Yugoslav economy is characterized by a strong cyclical pattern of recession
and boom, largely because of the economic disparities and nationalist antagonisms of
the semi-independent republics and provinces. Attempts to drown these rivalries in
rapid economic development have required massive spending that has boosted
inflation, external deficits, and debt. When the side effects become too pronounced,
brakes are applied, which reduce economic activity and lead to substantial unemploy-
ment. Yugoslav policy thus has alternated between expansion and restraint, producing
strong cyclical fluctuations in economic activity. Unemployment and external deficits
have become serious since 1973, mainly because of the slowdown of growth in
Western Europe. Yugoslavia needs Western Europe as an outlet for surplus labor and
as a key market for its exports; hard currency earnings are essential to pay for the
advanced equipment and technology necessary for growth and modernization of the
Yugoslav economy.
Economic crises have been avoided only by President Tito's ability to quash
divisive regional squabbles over investment allocations and to restrain cyclical surges
of inflation by imposing curbs on spending and prices. Tito's successors are not likely
to have the same success in managing these economic problems and the underlying
regional tensions.
Three Interrelated Problems
Unemployment
An estimated 5.6 percent of the Yugoslav labor force was out of work last year,
nearly double the 1973 rate. Unemployment is greatest in the rural southern regions
(Bosnia-Herzegovina, Montenegro, Macedonia, and Kosovo) with rapidly growing
populations. Job opportunities in the south are limited by per capita production about
one-half that of the industrialized north (Slovenia, Croatia, most of Serbia, Vojvodina).
Rising unemployment in Western Europe has forced home 250,000 Yugoslav workers
since 1973. An estimated 750,000 still work abroad.
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Yugoslavia's medium- and long-term hard currency debt grew from $2.7 billion
at yearend 1973 to about $5 billion at yearend 1977. The increase stems largely from
recurrent balance-of-payments deficits with the developed West. Sluggish West
European growth has slowed Yugoslav exports and remittances by Yugoslav guest
workers; remittances totaled an estimated $1.9 billion in 1977, or 30 percent of
Yugoslavia's hard currency earnings. Imports from the Nkest, on the other hand, have
continued to rise rapidly because of Belgrade's need for advanced technology and the
ease of obtaining Western financing.
inflation
Both external debt and domestic inflation (an average of 17.5 percent annually
since 1970) have been aggravated by easy money and big-spending policies rooted in
regional disparities and in certain economic traditions inherited from East and West.
Yugoslav economic practices are mixed, blending features of the Soviet-type com-
mand economy with features of the capitalist market economy. To minimize
interregional friction, considerable economic authority has been given to the individ-
ual republics. Within republics, monopolistic collusion among the government, banks,
enterprises, and workers' councils has resulted from a combination of (a) close ties of
nationalistic solidarity; (b) the paucity of federal fiscal-monetary controls; (c) the lack
of antitrust laws, and (d) the high degree of concentration in Yugoslav industry, where
one or two firms typically produce the bulk of a major product. The result is chronic
upward pressure on wages, spending, prices, profits, and credits.
In 1974-75, sharply rising import prices and global recession produced annual
consumer price increases of nearly 23 percent and current account deficits of more
than $1 billion. To right the imbalances, Tito temporarily and unofficially restored
centralized economic control via the Party hierarchy in 1976. Restrictions on imports,
prices. and credit, together with a concurrent jump in exports to the West, balanced
the external account and slowed inflation to 11 percent. But the policy restraints also
kept GNP growth at 4 percent and boosted unemployment.
Belgrade accordingly dropped central controls last year, permitting the regions to
resume their inflationary policies. Growth accelerated, causing unemployment to level
off but throwing external accounts back in the red. Imports from the West jumped 36
percent while exports increased only 8 percent. The hard currency deficit rose to a
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record $1.3 billion to $1.5 billion. When repayment obligations were added to the
deficit, the net borrowing requirement stood at approximately $2.5 billion.
Current Balance-of-Payments Policy
The Yugoslavs apparently are depending on continued easy borrowing abroad to
finance large imports. They are maintaining expansionary policies, opting to live with
a large external deficit in order to minimize unemployment. Industrial output growth
of 7 to 8 percent is targeted for 1978. No mention has been made in policy statements
of the need to rein in the external deficit, which would require slower growth and
severe restrictions on imports, credit, and prices. Any such reversion to austerity
measures only a year after the relaxation of restraints would be politically difficult,
particularly before the Party congress next May.
Belgrade is thus contenting itself with half-measures-floating the dinar down-
ward with the dollar, requiring more barter deals by Yugoslav importers, and pressing
for commercial and financial concessions from major trading partners, especially in
the developed West. Little relief can be expected from Soviet and East European
sources because of their own economic problems and hard currency stringencies. We
suspect Belgrade is hoping that the West will grant preferences because of fears that
Yugoslavia will drift into dependence on the USSR.
The Yugoslav government needs to take strong measures if the external deficits
are not to get out of hand. Prospects for exports and invisibles earnings remain clouded
by the continued lackluster performance of many Western economies. Maintenance of
a 6-percent GNP growth rate probably will require above-plan increases in oil
imports. Bank loans will be more difficult to obtain if the liquidity of bank lenders
tightens or if Yugoslavia's $2.5 billion in hard currency reserves is drawn down
substantially. In the latter event, Yugoslavia's credit rating might well plummet
because of (a) its inability under the decentralized system to enforce external financial
commitments by enterprises; (b) its history of past debt reschedulings; and (c) the
uncertainty of Yugoslavia's future debt repayment capabilities after the passing of
Tito, who has been called "the only Yugoslav."
Coping with Unemployment
Current trends raise the possibility of mushrooming unemployment. Belgrade
expects about 150,000 more Yugoslav workers to return from Western Europe through
1980, leaving about 600,000 abroad. Although large factories are overhiring in order
to alleviate local unemployment and plans to help some returnees establish small
businesses have been announced, the republic governments have provided little in the
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way of funds. The 6-percent GNP growth rate, on which Belgrade is relying to reduce
unemployment, is not being attained because of energy and balance-of-payments
constraints. Production of oil, coal, natural gas, and electricity has been falling behind
schedule because of investment shortfalls due in part to the constraints on importing
machinery and industrial raw materials.
Structural Reform?
\o major remedies for endemic cyclical fluctuations or other economic problems
are indicated in current policy directions. Stronger and more permanent central
controls through party channels have been urged by Tito's heir apparent Stane Dolanc
and by Edward Kardelj, top party ideologue, but no steps have been taken in this
direction. Indeed, recent laws have further decentralized the economy, giving
republics increased authority over hard currency allocations and food subsidies and
splitting enterprises into separate decisionmaking sections.
Yugoslavia: Regional GNP Disparities'
GNP
Per Capita
(Percent Share)
(1976 US $)
Total . ...............................................
100.0
100.0
1.220
1,980
Northern regions ..........................
7&5
78.3
1,450
2,4.30
Slovenia ....................................
15.2
16.8
2,200
4,020
Croatia ......................................
26.5
26.4
1.480
2.490
Serbia ........................................
25.1
24.0
1,190
1,880
Vojvodina ..................................
11.7
11.1
1,460
2,370
Southern regions ..........................
21.5
21.7
780
1,170
Bosnia-Herzegovina ................
124
12.4
880
1,320
Montenegro .......... ....................
1.8
1.8
840
1,400
Macedonia ................................
5.3
5.5
840
1,290
Kosovo ......................................
2.0
2.0
440
590
' Derived from official Yugoslav data.
Yugoslav programs have not narrowed the regional economic disparities that
have contributed to inflation and unemployment, As in many developing countries,
the gap in per capita GNP between richer and poorer regions is widening. Economic
growth has been as rapid in the less-developed south as in the north, but meanwhile
population in the south is growing at triple the northern rate. More than one-fourth of
the south's investment and much of its social services are financed by northern grants
or long-term loans. The IBRD has promised the south two-thirds of its planned
developed loans to Yugoslavia through 1980. But energy, minerals, and agricultural
development projects located largely in the south still take a back seat in domestic
allocation plans because of the greater clout of the northern republics. (Confidential)
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 25X6 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
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 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
SECRET
Publication of Interest*
Communist Aid and Trade Activities in Less Developed
Countries, Fourth Quarter 1977
(ER CAT 78-001, February 1978, Secret No forn-Nocon tract)
This report reviews Communist economic and military transactions in the Third
World during fourth quarter 197 7. It also contains two special articles on Soviet trade
and aid relationships with Egypt and Peru.
25X1A
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 National
o'del-gar Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
Assessment
Center
Economic Indicators
Weekly Review
ER EI 78-009
2 March 1978
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 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
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 Gift 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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 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
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 16 February 1978,
Comments and queries regarding the Economic Indicators Weekly Review are
welcomed.
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 BIG SIX FO RE1M1ge l5*Mf 05 K,0 1 51 8.WY6Ws
Industrial Production
140
130
INDEX: 1970=100, seasonally adjusted
Semilogarithmic Scale
Unemployment Rate Percent
kprgved For ReWV%2002/05/07 ifIdDP79T0131?f X010000100111 8
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Note: Three-monthaverage compared with previous three months.
Trade Balance
4.0
Percent Change
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
from Previous
1 Year
3 Months
MONTH
Month
1970
Earlier
Earlier2
Industrial
'.. Production
Big Six
NOV 77
19
2.9
0.7
3.1
Consumer Prices
Big Six
DEC 77
0.5
9.4
7.8
5.5
United States
DEC 77
0.5
6.5
6.8
4.4
Billion US $, f.o.b., seasonally adjusted
APR JUL OCT JAN
1976
3 Months
LATEST MONTH i Year Earlier Earlier
Unemployment Rate
Big Five NOV 77 4.3
United States NOV 77 6.7
Trade Balance
Big Six
United States
NOV 77 3,536 31,912
NOV 77 -2,082 -24,479
3.6
4.0
4.5
8.0
7.0
12,790
19,174
-5,012
-19,467
2Average for latest 3 A tpro ped For e eReleas eevious 2002/05/07e: CIA RDP79TOt1316A001000010011-7 575271 2-78 3 months, adjusted at annual .
A-3
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INDUSTRIAL PRODUCTION INDEX: 1970=100, seasonally adjusted
-120
1973 AVERAGE 120
West Germany
130
120
140
130
-120-
110
JAN APR JUL OCT JAN 114 PR 1U AP U PR J T JAN APR JUL OCT
J' Ap?8'vegFTFor',elease`20~`2~/007` Id-R ~79Th131~ 80010011
-7
1973 1974 1975 1976 1975
A-4
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United Kingdom
Italy
L03
I
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
- -- -- - -- - - -- -- ---- --------------
JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Percent
Change
from
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
from
? AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
Previous
1 Year
3 Months
LATEST
Previous
1 Year
3 Months
MONTH
Month
1970
Earlier
Earlierl
MONTH
Month
1970
Earlier
Earlierl
United States
JAN 78
-0.7
3.4
4.8
1.9
United Kingdom
DEC 77
I 1.4
.4
-1.2
-4.7
Japan
DEC 77
-0.3
4.0
3.3
8.7
Italy
DEC 77
1.4
2.7
-10.0
17.7
West Germany
DEC 77
1.7
2.4
2.6
4.7
Canada
NOV 77
0.6
3.9
4.5
0.6
France
DEC 77
-3.1
2.8
-1.6
-1.1
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
lAverage for latest 3 m t s compared with average for previous 3 months.
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
UNEMPLOYMENT RATE PERCENT
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
United Kingdom
Italy (quarterly)
3.8
3.47
A labor force survey based on new definitions of economic activity sharply raised the official estimate of Italian unemployment In first quarter 1977. Data for earlier periods thus are not comparable.
Italian data are not seasonally adjusted.
3
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
THOUSANDS OF PERSONS UNEMPLOYED
1 Year
Earlier
3 Months
Earlier
1 Year
Earlier
3 Months
Earlier
United States
JAN 78
6,226
6,958
6,872
United Kingdom
FEB 78
1,409
1,331
1,433
Japan
NOV 77
1,110
1,070
1,130
Italy
/7 IV
1,598
777
1,692
West Germany
JAN 78
1,008
1,020
1,031
Canada
DEC 77
911
772
798
France
JAN 78
991
945
1,100
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 1975-78, 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. Beginning in
1977, Italian rates should be decreased by 50 percent to be roughly comparable to US rates.
Approved For Release 2002/05/07 : CIAI;RDP79T01316AO01000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
CONSUMER PRICE INFLATION Percent, seasonally adjusted,
Japan
45
40
35
30
25
20
West Germany
90
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
I Three-month average compered with previous three months.
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
A-s
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
United Kingdom
Italy
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST Previous 1970 1 Year 3 Months LATEST Previous 1970 1 Year 3 Months
MONTH Month Earlier Earlier2 MONTH Month Earlier Earlier2
Percent AVERAGE ANNUAL Percent
Change GROWTH RATE SINCE Change
from from
Japan DEC 77 0 10.1 4.8 2.1 Italy
West Germany JAN 78 0.2 5.4 3.3 2.0 - Canada
France DEC 77 0.5 9.0 9.0 7.9
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
A-9
 Approved For Release 2002/0
5/0~ETkj[AS T9T01316A001000010011-7
Average
Arnrd Grasso Rats Sint.
Anrog.
Arrwef Growth Rot. Sint.
Bre
Latost Gone
Quarts. Q
nt Change
Prwioua I Yea, Prniwa
uarts. 1970 Ender charter
Law
Month
Fwcw,f Change
from Previous
Month
1970
1 Year 3 Months
Earl. Earlier'
United States
77 IV
United S
tates
Dec 77
-1.3
3.2
0.9
11.6
Japan
77 111
Japan
Sep 77
- 4.2
9.3
4.1
0.7
West Germany
77 III
West G
ermany
Oct 77
- 1.7
2.1
3.6
- 3.3
France
77 111
France
Nov 77
6.7
-0.6
-3.0
-12.0
United Kingdom
United K
ingdom
Dec 77
3.2
1.4
1.1
0.8
Italy
Italy
Oct 77
-6.8
1.9
-4.0
- 11.1
Canada
Canada
I
Oct 77
2.0 1
4.3 1
1.4 I
11.5
' 5.asonoAy adjusted.
' 5eaanaOr adFpst.d.
' Average for latest 3 month. congar.d wflh amongs for pr.vioss 3 months.
Avorap.
Armod Growth Rate Sins.
A-.rap.
Pwcem Chug.
Ps.p
Amwd Growth Rate Smite
nt Ching.
La nit from Frwiovs I Year 3 Months
Latest
Quarter
from
Previous
Oua,t.r
1970
I Year
Eveler
ft-mt.
Qwt.r
United Stoles
Period
Jon 78
Period
1970
Farts.
Earlier I
United States
Japan
77 111
Japan
Oct 77
West Ge
rmany
77 111
West Germany
77 111
France
77 IV
France
77 III
-2
7
United Kingdom
.
53.2
United Ki
ngdom
Nov 77
Italy
-27.6
Italy
Nov 77
Canada
-4.2
' hourly eannkw (waso
n ly anted)
For the United Sto
tts. Japan. a
nd Cando.
homy wag.
' Seasonally a4at.d.
rata for others. West Germm and French data refer to the beginsong of the quarts..
'M we . tar bled 3 r.enlfa caned with that (a prwious 3 months.
Latest
Dot.
I YOM
Eater
3 Month,
Earls.
I Month
Earls.
United States
Commercial paper
Fab 22
Japan
Call money
Feb 24
West Germany
Interbank loans (3 months)
Feb 22
France
Call money
Fab 24
United Kingdom
Sterling interbank loans (3 months)
Feb 22
Canada
Finance paper
Feb 22
Eurodollars
Three-month deposits
Feb 22
Approved For Release 2002107 CIA-1U01 1-7
A-10
 EXPORT Ann oved For Release 2002/05/07 : CIA
PRICE9
-F f00ftM001000010011-7
us $
National Currency
Average
Average
Annual Growth Rate 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
Dec 77
1.1 9.3 3.0
6.2
United States Dec 77 1.1 9.3 3.0
6.2
Japan
Dec 77
3.8 11.3 14.1
50.0
Japan Dec 77 2.3 5.4 -6.6
0
West Germany
Nov 77
0.8 11.3 8.2
9.9
West Germany Nov 77 -0.8 4.2 0.6
-3.5
France
Sep 77
-1.4 11.2 8.3
11.7
France Sep 77 -0.9 9.4 8.5
10.1
United Kingdom
Dec 77
2.0 11.6 22.0
32.7
United Kingdom Dec 77 0.1 15.6 10.3
3.8
Italy
Sep 77
-0.8 11.2 13.4
9.8
Italy Sep 77 -0.7 16.6 18.7
8.9
Canada
Oct 77
-2.3 8.7 -5.7
-12.0
Canada Oct 77 0 9.4 6.5
1.3
IMPORT PRICES
OFFICIAL RESERVES
National Curren
cy
Average
Billion US $
Annual Growth Rate Since
Latest Month
Percent Change
1 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 Jan 78 19.5 14.5 18.7
19.0
United States
Dec 77
-1.6 12.6 6.1
-3.3
Japan Jan 78 23.4 4.1 16.5
19.6
Japan
Dec 77
-2.6 8.2 - 15.5
-33.0
West Germany Nov 77 36.8 8.8 34.6
34.9
West Germany
Nov 77
1.4 4.0 0.8
- 8.3
France Oct 77 10.1 4.4 9.6
9.9
France
Sep 77
-1.0 10.1 7.4
0.6
United Kingdom Nov 77 20.7 2.8 5.2
15.0
United Kingdom
Dec 77
0.1 18.1 3.0
-6.7
Italy Dec 77 11.6 4.7 6.7
10.5
Italy
Sep 77
1.0 20.8 15.8
8.4
Canada Nov 77 4.2 4.3 5.1
4.8
Canada
Oct 77
1.0 8.7 15.6
1.8
BASIC BALANCE '
CURRENT ACCOUNT BA
LANCE '
Current and Long-Term-Capital Transactions
Cumulative (Million US $)
Cumulative (Million
US $)
Latest
Latest
Period Mill
ion US $ 1977 1976
Change
Period Million US $ 1977 1976
Change
United States 2
77 III -4,302 -13,064 -48 -
13,016
United States No longer published'
Japan
Dec 77
2,180 11,112 3,680
7,432
Japan Dec 77 1,920 7,876 2,696
5,180
West Germany
Dec 77
1,205 3,584 2,659
926
West Germany Dec 77 1,987 - 1,648 2,472
-4,120
France
77 IV
136 -3,179 -5,721
2,541
France. 77 IV 149 -3,218 -6,842
3,624
United Kingdom
77 III
916 -691 -1,539
848
United Kingdom 77 III 2,238 3,995 -1,585
5,581
Italy
77 II
161 -761 -2,859
2,098
Italy 77 11 97 -392 -2,963
2,571
Canada
77 III - 1,150 -4,106 -3,215
-890
Canada 77 111 346 - 446 3,239
-3,684
' Converted to US dollars at the current market rates of exchange.
Converted to US dollars at the current mo?ket rates of exchange.
s As recommended by the Advisory Committee on the Presentation of Balance of Payments
r Seasonally adjusted.
Statistics, the Department of Commerce no longer publishes a basic balance
.
TRADE-WEIGHTED EXCHANGE RATES'
EXCHANGE RATES
As of 24 Feb 78
Spot Rate
Percent Change from
Percent Change from
As of 24 Feb 78
US $
1 Year 3 Months
1 Year 3 Months
Per Unit
19 Mar 73 Earlier Earlier
17 Feb 78
19 Mar 73 Earlier Earlier 17 Feb 78
Japan (yen)
0.0042
10.33 18.93 0.70
0.50
United States 1.22 -4.63 -2.57 -
0.71
West Germany
0.4950
39.81 18.54 9.74
2.03
Japan 14.19 16.19 -0.95
0.17
(Deutsche mark)
West Germany 33.64 8.68 3.50
0.59
France (franc)
0.2099
-4.76 4.70 1.70
1.12
France -14.21 -6.68 -5.53 -
0.47
United Kingdom
1.9280
-21.66 13.11 6.08
-0.82
United Kingdom -26.82 6.04 1.07 -
2.03
(pound sterling)
Italy -41.73 -6.53 -3.14 -
1.01
Italy (lira)
0.0012
-33.67 3.53 2.89
0.43
Canada -10.00 -9.84 -1.64
0.18
Canada (dollar)
0.8964
- 10.15 -7.54 -0.66
0.32
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.
App
roved For Release 2002/05/07 : CI
-RDP79T01316AO01000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
Big Other Com- Big Other Com-
Worl d Seven OECD OPEC munist Other World Seven OECD OPEC monist Other
UNITED STATES
1975 ............. 107.65
46.94
16.25
10.77
3.37
29.82
103.42
49.81
8.83
18.70
0.98
25.08
1976 ............. 115.01
51.30
17.68
12.57
3.64
29.44
129.57
60.39
9.75
27.17
1.16
31.09
1st Qtr ........ 27.37
12.18
4.11
2.75
1.08
7.24
29.34
13.72
2.40
6.07
0.27
6.88
2d Qtr ........ 29.69
13.38
4.51
3.11
1.01
7.51
31.65
15.36
2.41
6.07
0.28
7.54
3d Qtr ........ 27.43
11.94
4.09
3.11
0.78
7.42
33.74
15.24
2.40
7.55
0.31
8.24
4th Qtr ........ 30.52
13.79
4.97
3.60
0.76
7.26
34.84
16.07
2.55
7.48
0.30
8.44
1977
1st Qtr ........ 29.46
13.75
4.73
3.14
0.86
6.98
37.37
16.07
2.76
8.97
0.30
9.26
2d Qtr ........ 31.66
14.39
4.81
3.69
0.71
7.97
40.45
18.14
2.77
9.31
0.35
9.87
3rd Qtr ........ 28.75
12.23
4.39
3.58
0.47
7.98
39.50
17.73
2.78
8.92
0.32
9.74
JAPAN
1975 ............. 55.73
16.56
6.07
8.42
5.16
15.87
37.85
16.93
6.08
19.40
3.36
12.05
1976 ............. 67.32
22.61
8.59
9.27
4.93
17.84
64.89
17..58
7.78
21.88
2.91
14.72
1st Qtr ........ 14.44
4,89
1.83
1.87
1.28
3.76
14.84
4.09
1.70
5.22
0.67
3.16
2d Qtr ........ 16.42
5.46
2.09
2.27
1.32
4.39
15.89
4.35
1.95
5.40
0.66
3.54
3d Qtr ........ 17.54
5.95
2.27
2.47
1.09
4.52
16.81
4.51
2.14
5.41
0.74
4.01
4th Qtr ........ 18.92
6.30
2.40
2.66
1.24
5.17
17.34
4.62
2.00
5.86
0.84
4.01
1977
1st Qtr ........ 17.89
5.89
2.45
2.46
1.36
4.70
17.44
4.72
1.84
6.24
0.79
3.84
2d Qtr ........ 19.73
6.73
2.41
2.91
1.19
5.45
17.88
4.88
2.10
5.74
0.86
4.29
3d Qtr ........ 20.63
7.40
2.47
3.05
1.33
5.62
17.63
4.68
1.84
5.88
0.84
4.38
WEST GERMANY
1975
............. 91.70
28.33
36.44
6.78
8.81
11.05
76.28
27.09
27.78
8.24
4.87
8.21
1976
............. 103.63
33.44
41.86
8.25
8.72
11.04
89.68
31.28
32.64
9.73
5.93
10.01
1st
Qtr ........ 23.79
7.92
9.54
111
2.09
2.47
20.49
7.13
7.59
2.19
1.33
2.23
2d
Qtr ........ 24.96
8.21
10.12
1.84
2.08
2.64
21.94
7.70
8.13
2.22
1.43
2.42
3d
Qtr ........ 25.53
8.00
10.28
2.24
2.13
2.78
22.14
7.56
7.89
2:57
1.49
2.58
4th
Qtr ........ 29.35
9.31
11.92
2.46
2.42
3.15
25.12
8.88
9.03
2.73
1.67
2.78
1977
1st
Qtr ........ 28.19
9.28
11.62
2.31
2.11
2.78
24.45
8.46
8.85
2.58
1.42
3.11
2d
Qtr ........ 29.20
9.59
11.79
2.69
2.07
2.98
25.21
9.09
9.04
2.43
1.54
3.08
3d
Qtr ....... 28.75
9.20
11.45
2.71
2.26
3.04
25.27
8.99
8.97
2.54
1.65
3.09
FRANCE
1975
............. 52.87
20.00
15.50
4.90
3.13
8.61
53.99
23.04
14.33
9.43
1.94
5.21
1976
............. 57.05
22.49
16.15
5.08
3.23
8.75
64.38
27.81
16.93
11.36
2.24
601
1st
Qtr ........ 13.97
5.52
3.93
1.24
0.84
2.08
15.52
6.57
4.16
2.82
0.56
1.42
2d
Qtr ........ 15.02
5.91
4.41
1.22
0.98
2.23
16.19
7.15
4.33
2.61
0.55
1.53
3d
Qtr ........ 12.81
4.97
3.49
1.29
0.67
2.09
14.97
6.49
3.77
2.75
0.55
1.41
4th
Qtr ........ 15.26
6.08
4.33
1.33
0.75
2.35
17.70
7.60
4.68
3.19
0.58
1.65
1977
1st
Qtr ........ 15.68
6.25
4.53
1.39
0.75
2.36
17.89
7.50
4.84
3.06
0.52
1.96
2d
Qtr ........ 1&69
6.60
4.79
1.57
0.83
2.47
17.96
7.84
4.71
2.65
0.61
2.13
3d
Qtr ....... 14.75
6.02
4.08
1.32
0.67
2.39
16.14
6.99
3.85
2.87
0.62
1.78
UNITED
KINGDOM
1975
............. 44.03
12.55
16.59
4.55
1.56
8.64
53.35
18.47
18.52
6.91
1.68
7.67
1976
............. 46.12
14.03
17.53
5.13
1.39
7.92
55.56
19.66
18.81
7.29
2.08
7.65
1st
Qtr ........ 11.60
3.41
4.37
1.24
0.38
2.17
13.50
4.69
4.64
1.82
0.49
1.83
2d
Qtr ........ 11.46
3.53
4.32
1.26
0.37
1.95
13.96
5.04
4.57
1.74
0.56
2.03
3d
Qtr ........ 11.03
3.43
4.11
1.26
0.32
1.87
13.69
415
4,54
1.89
0.51
1.98
4th
Qtr ........ 12.03
3.64
4.74
1.38
0.31
1.93
14.41
5.17
5.06
1.84
0.51
1.81
1977
1st
Qtr ........ 13.13
4.01
5.16
1.52
0.35
2.04
15.45
5.80
5.12
1.78
0.49
2.22
2d
Qtr ........ 14.35
4.20
5.72
1.69
0.44
2.26
16.52
6.02
5.73
1.70
0.58
2.44
3d
Qtr ........ 14.59
4.47
5.55
1.75
0.46
2.32
15.20
6.05
4.74
1.44
0.66
2.29
Approved For Release 2002/f )87 : CIA-RDP79TO1 316AO01 000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
Developed Countries: Direction of Trade 1
(Continued)
Big
Other
Com-
Big
Other
Com-
World
Seven
OECD
OPEC m
unist
Other
World
Seven
OECD
OPEC
munist
Other
ITALY
1975 ............. 34.82
15.61
7.86
3.72
2.46
4.67
38.36
17.32
6.75
7.85
2.09
4.34
1976 ............. 36.96
17.41
8.69
4.23
2.18
3.96
43.42
19.35
8.04
8.12
2.65
5.24
1st Qtr
........ 8.01
3.80
1.86
0.83
0.53
0.87
9.77
4.37
1.83
1.82
0.54
1.21
2d Qtr
........ 8.85
4.22
2.09
0.97
0.52
0.95
10.83
4.85
1.94
2.10
0.63
1.31
3d Qtr
........ 9.45
4.51
2.22
1.07
0.53
0.99
10.33
4.51
1.85
2.03
0.67
1.26
4th Qtr
........ 10.65
4.88
2.53
1.36
0.59
1.14
12.49
5.62
2.42
2.17
0,81
1.46
1977
1st Qtr
........ 9.80
4.56
2.30
1.26
0.53
1.03
11.37
5.00
2.14
2.18
0.60
1.45
2d Qtr
........ 11.47
5.33
2.61
1.51
0.60
1.28
12.49
5.51
2.24
2.50
0.64
1.59
3d Qtr
........ 10.93
5.01
2.51
1.41
0.63
1.22
10.55
4.39
1.80
2.10
0.73
1.53
CANADA
1975
............. 33.84
26.30
1.73
0.71
1.20
2.00
38.59
29.78
1.70
3.43
0.32
2.02
1976
............. 40.18
32.01
2.03
0.81
1.25
2.09
43.05
33.55
1.82
3.48
0.38
2.56
1st
Qtr
........
9.18
7.39
0.43
0.47
0.33
0.42
10.40
8.05
0.42
0.95
0.09
0.59
2d
Qtr
........
10.75
8.61
0.50
0.18
0.34
0.56
11.61
9.02
0.45
1.02
0.10
0.70
3d
Qtr
........
9.94
7.74
0.56
0.20
0.35
0.53
10.12
7.75
0.47
0.80
0.10
0.69
4th
Qtr
........
10.31
8.27
0.55
0.26
0.23
0.58
10.91
8.73
0.48
0.71
0.09
0.58
1977
1st
Qtr
........
10.35
8.37
0.53
0.23
0.22
0.47
10.92
8.64
0.43
0.82
0.09
0.62
2d
Qtr
........
11.34
9.23
0.54
0.24
0.29
0.57
12.28
9.92
0.47
0.74
0.10
0.67
3d
Qtr
........
10.21
8.12
0.54
0.23
0.29
0.62
10.37
8.17
0.43
0.82
0.07
0.65
25X1X
Approved For Release 2002/05/07 MPA-RDP79T01 316AO01 000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
FOREIGN TRADE BILLION US $, f.o.b., seasonally adjusted
14.0
12.0
10.0
West Germany
10.0
8.0
2.0
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
A-14
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
United Kingdom
1.5
JAN APR JUL OCT
1973
APR JUL OCT JAN
1977
Semilogarithmic Scale
CUMULATIVE (MILLION US $)
LATEST
MONTH
MILLION ?
US $ 1977
1976
CHANGE
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE:
United States
DEC 77
11,030
120,107
114,860
4.6%
United Kingdom
JAN 78
5,088
56,304
46,003
25.336
13,059
146,615
120,495
21.7%
5,715
59,204
52,466
15.1%
Balance
-2,030
-26,508
-5,635
-20,873
Balance
-627
-2,900
-6,463
3,904
Japan
DEC 77
7,042
5,247
79,212
61,752
65,751
56,004
20.51?
10.3%
Italy
NOV 77
4,182
3,728
40,523
40,042
33,427
36,777
21.0?%
8.7?,0
Balance
1,794
17,460
9,747
7,713
Balance
455
482
-3,349
3,834
West Germany
DEC 77
10,402
117,787
101,923
15.2.b
Canada
NOV 77
3,008
37,820
35,202
7.5%
9,215
96,533
83,574
15.6%
22,905
36,120
34,726
4.1%
Balance
1,187
21,254
18,349
2,467
Balance
103
1,700
475
1,223
France
JAN 78
5,690
65,087
56,967
14.1?,,
6,083
67,389
61,068
10.3%
Balance
-393
-2,302
-4,101
1,884
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
A-15
 Approved For Release 2002/05/07 : CIA-RDP79T01316A001000010011-7
FOREIGN TRADE PRICES IN US $1
r'
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1974 Approved MR blease 200M557 : CIA-RDP$fT0l316A0010AY-Th11-7
lExport and import plots are based on fivemonth weighted moving averages.
A-16
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
United Kingdom
107
104
1 9A7pproved For lase 2002/05/d7&A-RDP79T i'13??67AO010000106?1?f
575264 2-78
 Apprgncr(fT a?s, rafjy5P7 ~lA-F3rD ,9,jQ7 3~AQ01000010011-7
MONEY SUPPLY'
INDUSTRIAL PRODUCTION'
Anwap.
Avrop.
Amrd
Growth Rot. Sine
Arwd Growth Rai. Sic.
Perant Chap.
Percent Charge
Louth
From Pr.viae
1 Year
3 Months
Lotnt
has Previous
1 Y.
3 Montt
Month
Month
1970
Eoir
EMS.,'
Period
Period
1970
Fair
Eair
Brazil
Aug 77
0
36.7
46.2
59.1
India
Aug 77
4.0
4.9
8.2
-7.3
India
Aug 77
2.9
13.4
15,6
7.8
South Korea
Nov 77
0.3
21.9
13.9
9.2
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
Oct 77
0.5
14.9
13.5
23.1
Nigeria
Apr 77
-2.3
36.9
47.5
99.7
Taiwan
Oct 77
3.2
24.8
29.1
30.6
S.o.o oiy aduntd
.
Thailand
Jun 77
-0.9
13.2
13.0
14.9
Avrog* fa I f. t
3 ma hd cwrp d with mere.
for pr.viout 3 aonfhs.
+y o*mfod
.
? Asap for M.ti
3 manna compa.d with. anrog. for prwiovt 3 mantis.
CONSUMER
PRICES
WHOLESALE
PRICES
Ararop.
Aver ge
A,-.d Cxowtr Rat. Sine.
Amwaf Growth
Rot. Since
Prcwrt Chang.
P.rc.rrt Change
Low
from hvrioin
1 Y.or
Lotnt
from Previous
I Yea
Month
Month
1970
Eair
Month
Month
1970
Earlier
Brazil
Dec 77
2.3
27.4
43.1
Brazil
Oct 77
2.3
27.2
34.4
India
Oct 77
-0.3
8.3
8.6
Indio
Dec 77
0.3
8.6
3.9
Iran
Nov 77
0.7
12.2
23.9
Iron
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
Oct 77
-0.2
8.7
3.8
Taiwan
Oct 77
-1.1
10.6
9.9
Thailand
Oct 77
-1.2
9.7
5.5
Thailand
Oct 77
0.5
8.7
9.0
EXPORT PRICES
OFFICIAL RESERVES
US $
Mzanus s
Averao.
Latnt Month
Arwd Growth Rat. Sine.
1 Yom
3 Month,
Percent chap.
End of
Mtion Us S A. 1970
EarSr
Earlier
Latent
from Pvhian
I Yea
Brazil
Aug 77
6,195
1,013
4,405
5,806
Period
Period
1970
Eerier
India
Oct 77
4,886
1,006
2,788
4,395
Brazil
Sep 77
-8.2
13.3
4.7
[ran
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
77 111
0.9
8.6
6-5
Nigeria
Oct 77
4,551
148
5,635
4,495
Nigeria
May 76
-0.1
27.3
12.3
Taiwan
Nov 77
1,469
531
1,676
1,416
Taiwan
Sep 77
2.6
12.1
0_2
Thailand
Nov 77
1,864
978
1,893
1,992
Thailand
Dec 76
2.0
13.3
13.1
Approved For Release 2002/M/17 : CIA-RDP79TO1 316AO01 000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
Latest 3 Months
Percent Change from
3 Months 1 Year
Latest Period
Earlier'
Earlier
1977
1976
Change
Nov 77 Exports
-51.6
-0.2
11,083
9,043
22.6%
Nov 77 Imports
-6.5
-5.1
11,012
11,305
-2.6%
Nov 77 Balance
71
-2,262
2,333
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
Oct 77 Exports
-18.9
12.8
7,440
6,572
13.2%
Oct 77 Imports
-31.0
9.8
6,353
5,667
12.1%
Oct 77 Balance
1,087
904
183
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 2002/05/07 :~C'l -RDP79T01 316AO01 000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
WHEAT
S-PER BUSHEL
7.5
No. 2 Medium Grain. 4'~ Brokens.
f.o.b. mills. Houston. Texas
0 1-22 FEB Ii 0 O _ 1-22 FEBII O
1974 1975 1976 1977 1978 1974 1975 1976 1977 1978
RICE
37.5 S PER HUNDRED WEIGHT
13 FEB
23.50
6 FEB
23.50
JAN 78
23.50
FEB 77
13.00
1-13 FEB I I
1974 1975 1976 1977 1978
22 FEB 0.5237
15 FEB 0.5183
JAN 78 0.5184
FEB 77 0.7309
CORN
S PER BUSHEL
2.000
350
300
1,500
1.000
200
1-22 FEB11
1976 1977 1978 0
COFFEE
Other Milds Arabicas, ax-dock New York
22 FEB 195.81
15 FEB 201.33
JAN 78 206.46
FEB 77 245.48
TEA
London Auction
1-22 FEB11 0 50 , .. .. 111-22 FEB
Approved For Release 2002/957:CIA-RDP79T01316A001000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
SOYBEAN OIL
Crude, Tank Cars, f.o.b. Decatur
22 FEB 0.2212
15 FEB 0.2139
JAN 78 0.2091
FEB 77 0.2226
SOYBEANS
15 $ PER BUSHEL
500 400
1-22 FEBII
100
0
SOYBEAN OIL/PALM OIL
Crude, Bulk, c.i.f. US Ports
22 FEB 0.2650
0.1 15 FEB 0.2500
JAN 78 0.2313
FEB 77 0.2300
1-22 FEBII
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.
SOYBEAN MEAL
$ PER TON
22 FEB 153.00
15 FEB 152.00
JAN 78 162.88
FEB77 210.76
$ PER METRIC TON 400
1976. 1977 1973
Approved For Release 2002/05/07 : CI"DP79T01316AO01000010011-7
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 c PER POUND
LEAD
S PER METRIC TON 45 C PER POUND
22 FEB
24.7
33.0
15 FEB
26.8
330
JAN 78
29.9
330
32.50035
FEB 77
29.3
28.9
1-22 FEBII
40 1974 1975 1976 1977 1978
80
LME US
22 FEB 209 310
15 FEB 22.1 31 O
JAN 78 23.5 310
FEB 77 31.9 370
1.000 1-22 FEB 10 I
200
1974 1975 1978 1977 1978
LME U5
22 FEB 544.6 590 7
15 FEB 553.1 595 5
JAN 78 549.2 592 3
FEB 77 464.0 507 4
LME1
700
21.8 250
1-22 FEBII
0 1974 1975 1976 1977 1978 0 150
US
21 FEB 738
15 FEB 73.8
JAN 78 72.4
FEB 77 73.2
1-22 FEBtj
1974 1975 1976 1977 1978
$ PER METRIC TON
14,000
220.9
205.0
1-21 FEB11 0 1-22 FEB It
0 1974 1975 1976 1977 k1978 100 1974 1975 1976 1977 1978
2.000
550
1.500
Approved For Release 2002/05/07 : CIA-RDP79TO1 316AO01 000010011-7
A-22
 Approved For Release 2002/05/07 : CIA-RDP79T01316AO01000010011-7
CPYRGHT
ALUMINUM
Major US Producer
It per pound
53.00
53.00
48.00
41.00
US STEEL
Composite
$ per long ton
387.54
357.08
339.27
306.72
IRON ORE
Non-Bessemer Old Range
$ per long ton
21.43
21.43
20.97
19.12
CHROME ORE
Russian, Metallurgical Grade
$ per metric ton
N.A.
150.00
150.00
150.00
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
56.00
58.50
42.00
39.00
FERROCHROME
US Producer, 66-70 Percent
C per pound
41.00
42.39
43.00
45.00
NICKEL
Composite US Producer
$ per pound
2.07
2.41
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
18,537.00
21,111.00
21,419.00
11,509.00
MERCURY
New York
$ per 76 pound flask
160.00
116.30
167.55
127.21
SILVER
LME Cash
E per troy ounce
497.32
447.09
453.72
408.78
GOLD
178.36
144.95
136.31
131.07
RUBBER
60 0 PER POUND
1-22 FEB 11
1977 1978
LUMBER INDEX6
160
140
;1,000
120
100
1-10 FEB
1977 1978
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.
6This index is compiled by using the average of 13 types of lumber whose
prices are regarded as bellwethers of US lumber construction costs.
1-14 FEB 11
1976 1977 1978
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.
_FNP79TO1316AO01000010011-7