An extremely grim world economic situation has emerged in the past year because of high inflation on a global scale, a marked slowdown in growth and volatile trading relationships, according to the annual report of the International Monetary Fund.
The IMF also warned that the impact of soaring trade deficits in developing countries that do not produce oil is threatening the ability of these nations to find financial support for continued trading and economic expansion.
A slowdown in industrial nations could lead to a halt in the expansion of wolrd trade and create another international recession, the Washington-based organization said in a report scheduled for publication next weedend.
Privately, officials of the IMF have said they expect that a major theme of debates at the world body's annual meetings starting here later this month will be urgent appeals by developing nations for more extensive help from the richer countries.
At the same time, an IMF official forecast that the predicted debates are not expected to result in substantive policy changes or initiatives from the rich countries. Nor is any softening expected in implementation of IMF lending guidelines, although some international lending executives anticipate a move to permit longer periods for loan repayments by countries that are strapped for funds.
In varying degrees, a major factor in all of the recent negative economic trends has been the more than doubling of oil prices after the end of 1978. A midyear IMF economic analysis in June had placed the blame for world economic woes squarely on oil prices.
In its annual report, the IMF expressed particular concern about the sharp growth in trading deficits of the non-oil-developing nations from $36 billion in 1978 to $53 billion last year and to an estimate of nearly $70 billion for 1980.
These deficits will continue to rise considerably in 1981, creating "one of the major issues confronting the fund as well as the countries themeselves," the report stated.
But the Imf also stated that inflation in industrial countries is the single most disturbing feature of the current world economic situation. The IMF monitors the state of the economy in the world and its 140 member nations and provides policy advice and financing to countries in difficulties.
Continuation of a very slow expansion in the industrial nations' output, perhaps as little as 1 percent a year, was forecast for 1980 and 1981, including outright declines this year in the United States and Britain.
The IMF study offered no inflation forecast but said the slowdown in worldwide economic activity, although far from welcome, would tend to relieve some upward pressures on prices.
Combined current current account trading balances (sums of trade and other cash transactions with other nations) of industrial countries could reflect a deficit of $50 billion in 1980, a negative shift of more than $80 billion from 1978 that is concentrated almost entirely in the trade balances of West Germany, Japan and Italy, three nations with the strongest trading positions just two years ago.
In contrast, from a weak position in 1978, the U.S. balance has shown a marked improvement that reflects effective depreciation of the dollar in 1977 and 1978.