A high official of the International Monetary Fund said today that there will be no "significant decline" in unemployment among the industrial countries in the year ahead, an unfavorable trend that is likely to strengthen protectionist pressures.
In a speech prepared for delivery this morning in Geneva, the IMF's Deputy Managing Director William B. Dale said such pressures "must be resisted" in order to encourage exports from less developed areas.
Dale's speech, to the United Nations Economic and Social Council, was released by the IMF here.
Dale said that beyond energy conservation and efforts to develop alternatives to oil, "Now much can be done in the short term" to reduce the massive current account deficit of the oil-importing world.
But without naming West Germany, Japan, Switzerland and the Netherlands specifically, he said that countries with surpluses could help assure "a sustainable distribution" of the global deficit by allowing their favorable balance to be reduced.
Dale's statements follow similar presssure by Treasury Secretary W. Michael Blumenthal.
The IMF official's rather gloomy assessment of the industrial nations' jobs outlook was part of a new set of staff projections for 1977 and early 1978. Dale said that real economic growth would run about 5 per cent with one encouraging factor an upturn in field investment. The rate of inflation, he said, would continue to run between 5 and 7 per cent next year.
Nevertheless, Dale cautioned against rapid expansionary policies to boost growth and unemployment, where countries also face the "dilemma of inflation and a balance of payments deficit."
We are beginnig to discover that this dilemma is more apparent than real," Dale said. "The Fund's experience in recent years shows clearly that appropriate adjustment policies - looking beyond their immediate short-term effects - need not be detrimental to growth and employment, but on the contrary, can provide in many cases an essential basis for a healthier and more sustained economic development.
Dale summarized the staff projections for the non-industrial countries this way:
Oil exporting countries: domestic prices will accelerate, and growth rates will decline "considerbly." Current account surplus will decline about $2 billion to $39 billion.
Non - oil primary producing countries: Higher growth rates, inflation remains high but under control. Aggregate current account deficit will decline $2.5 billion to 37.5 billion.
More advanced primary producing countries: Real economic growth (3 per cent in 1976) is "not likely to revive this year." Price increases "continue at a high level." Current account deficit of $12.5 billion is twice the real 1967-72 average. This is the group of countries which has been slow to adjust to inflation and recession. "After nearly four years of strong foreign borrowing."