The economic outlook for the global economy has deteriorated appreciably over the past six months. By the late spring it had already become clear that growth in the OECD economies would slow to around 2½ per cent this year from 3 per cent in 1997, with strong domestic demand outside Japan being offset by the growing impact of the contraction in the Asian economies. However the further slowdown projected in 1999 appeared relatively benign, with monetary conditions remaining accommodative in the major economies and commodity prices remaining weak.