Treasury Secretary Donald T. Regan admitted today that he had been impressed with the case made by "rich and poor nations alike" that high interest rates are having an adverse effect on their economies.
"And they attribute high interest rates to our budget deficit," he said in an interview after a meeting of the International Monetary Fund's policy-making interim committee.
"They all say the same thing," Regan observed. "They say that interest rates have to come down not only for the sake of their own individual economies, but for the benefit of the whole world."
Regan's basic response is that the United States also is troubled by high interest rates, and will do its best to get them down. But he said in the interview that he will report to President Reagan on the depth of European feeling, which may be of help in administration planning for next month's summit meeting.
The interim committee communique issued today included a passing reference to high interest rates and widely fluctuating exchange rates as among "the difficult problems" facing the world. But it cautioned against a premature shift toward monetary expansion.
Other problems listed were high unemployment, rising protectionism, and large balance of payments deficits in many countries. For all of this mixed bag "there are no quick and easy" answers, the communique said, falling back on the need for a "sustained pursuit of a balanced set of policies."
Some nations, led by India, it was learned, had wanted the interim committee to take a more decisive stand on fighting unemployment. On the other hand, Regan, in his formal address to the interim committee, said flatly that "I would strike a somewhat more optimistic tone about the global economic situation than has Managing Director Jacques de Larosiere."
De Larosiere issued a forecast calling for real economic growth of only 0.8 percent in all industrial countries this year, rising to 2.5 percent in 1983. For the United States, the IMF executive predicted a decline of one percent this year and growth of only 1.8 percent in 1983.
Regan had a brighter economic forecast, starting with a 4 to 4.5 percent real gain for the United States in the second half of this year. But the basic underlying U.S. optimism, Regan explained to the interim committee, runs to substantial gains on the inflation front, but "most important, we expect more or less complete elimination of the OPEC surplus this year."
Weakness in the oil market is not a temporary phenomenon, Regan told the closed-door session. "Elimination of the OPEC surplus will be reflected in equally sharp improvement in the aggregate current account position of oil importers." In other words, he added, the "reduction in the OPEC surplus will have the effect of shifting demand to the industrial world, thereby stimulating growth."
The interim committee communique ignored this American view, noting only the "rapidly changing pattern of international payments." Many of the poor countries view the declining OPEC surplus with alarm, assuming that their oil bills will not decline as quickly as the availability of OPEC loans to them through the international agencies.
For example, World Bank President A. W. Clausen told the opening session of the IMF-Bank Development Committee that the outlook for official development assistance is bleak because of the disappearance of the OPEC surplus, and because of big budget deficits in the industrial world.
Perhaps the major substantive step announced in the IMF communique was agreement that work on the eighth quota review--the next installment of adding to IMF resources--was given high priority, with a decision to be made final before the end of 1983.
That had been one of De Larosiere's objectives before the meeting. He also won assent for language that assigns the IMF "an important role" in the adjustment and financing of balance-of-payments deficits.
The general sense of the discussion among the ministers in private was that there would be a modest increase in quotas--far from the tripling of the current 60 billion special drawing rights (roughly $70 billion).