Japan, France and Canada can expect a decade of solid growth in the 1980s and the outlook for Britain and Italy is bleaker than ever, according to Chase Econometrics.
In a forecast entitled "A Decade of Crisis," Chase shows sharply divergent growth paths among America's allies. This pattern is particularly marked within the European Common Marked, leading to the possibility of a "two-tier community" -- West Germany, France and the Benelux nations in the lead, with Britain, Italy and the new Mediterranean members lagging.
The Chase document foresees slow but stable growth for Germany and Japan. Japan will mount a new export drive especially in cars and electronics, but its current account will stay in deficit until 1988, the document says.
The North Sea oil boom in Britain will run out of steam and that nation will return to "sluggish" growth, Chase says. But France will be the boom nation of the 1980s, achieving the highest growth rate in the Common Market.
Here is a country-by-country survey of the major nations singled out by Chase:
Britain -- The 1980s will be the decade "Britain missed its chance to revitalize its industrial base and reverse its postwar economic decline."
In 1980, gross domestic product will fall by 2.3 percent while inflation rises to 16.1 percent. There will be an export-led recovery in 1984, but the lack of recent investment will keep this from lasting long and the British economy in the last half of the decade will resemble the picture for the first half of the 1970s.
France -- In 1980, economic growth will be only one percent and inflation will hit 12 percent. But the Giscard-Barre government has returned France to a free-market system, and the nation has achieved political stability that makes it "one of the most attractive locations for foreign direct investment."
The result will be an annual growth rate in the 1980s of about 3.5 percent, coupled with slowly falling inflation and unemployment.
Germany -- "Germany will continue to be distinguished more for stability than for rapid growth." Average growth will be 2.8 percent, and inflation and unemployment will both stay around 4 percent.
Japan -- With the fall in the yen's value, Japanese exports are more competitive and Japan will mount a major export drive. But the world is more protectionist-minded than it used to be, and this drive will be only half as successful as Japan's 1976-78 export campaign.
Growth this year will be 4.4 percent compared with 6 percent in 1969-78, and inflation will near double digits.
Italy -- High inflation, hugh government deficits, weak consumer demands and sagging competitiveness in exports will produce "an especially bleak 1980" for Italy Growth will be about 1.1 percent, and inflation will stay above 16 percent.
Canada -- A steep decline this year of some 0.7 percent in growth will be an unavoidable spinoff from the American recession. But Canada will emerge from this recession with relatively low inflation, an improved export picture and restained monetary policies.