It is now clear that output in the OECD countries rose even faster in the early stage of the recovery than we had previously supposed. Between the third quarter of 1975 and the first quarter of 1976 their aggregate GDP appears to have increased at an annual rate of 7 per cent and their industrial production at 12 per cent. By the second quarter, however, stock movements were probably making a substantially smaller contribution to the expansion of demand. The rate of growth of industrial production has slowed down considerably since the spring and the same is probably true of GDP, particularly in view of the effects of the drought on European agricultural output. By the second half of next year we expect the deceleration to become more pronounced in the major countries, particularly the United States. The smaller countries have, however, been lagging behind their bigger trading partners in the recent cycle and their phase of rapid recovery is probably yet to come. In all we expect OECD countries' aggregate GDP to increase in volume by 5½–6 per cent this year and 5 per cent in 1977.