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OECD
ECONOMIC SURVEYS
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A F! C K i V £ S
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R É F È ii E ?v C
BELGIUM
LUXEMBOURG
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
\
Pursuant to article J of the Convention signed in Paris on 1 4th December,
1 960, and which came into force on 30th September, 1 96 1 , the Organisation
for Economic Co-operation and
Development
(OECD) shall promote
policies designed:
-
to achieve the highest sustainable economic growth and employment
and a rising standard of living in Member countries, while maintaining
financial stability, and thus to contribute to the development of the
world economy;
-
to contribute to sound economic expansion in Member as well as
non-member countries in the process of economic development; and
-
to contribute to the expansion of world trade on a multilateral,
non-discriminatory basis in accordance with international obliga¬
tions.
The original Member countries of the OECD are Austria, Belgium,
Canada, Denmark, France, the Federal Republic of Germany, Greece,
Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United
States. The following countries became Members subsequently through
accession at the dates indicated hereafter; Japan (28th April, 1 964), Finland
(28th January, 1969), Australia (7th June, 1971) and New Zealand
(29th May, 1973).
The Socialist Federal Republic of Yugoslavia takes part in some of the
work of the OECD (agreement of 28th October, 1961).
Publié également en français.
© OECD, 1988
Application for permission to reproduce or translate
all or part of this publication should be made to:
Head of Publications Service, OECD
2, rue André-Pascal, 75775 PARIS CEDEX 16, France.
Contents
BELGIUM
Introduction
I.
II.
1 1
Review of five years of corrective policy
13
Mounting imbalances up to the early 1980s
14
Economic policy responses
15
Restoring the economic situation
17
Cost of the corrective programme
26
The fiscal consolidation effort
29
Structure of public spending and factors influencing its growth
29
The financing of public expenditure and the growth of the public
debt
III.
IV.
Notes
37
Pressure due to the increase in the tax burden and public debt
48
Continuing need for fiscal consolidation
56
Economic policy, recent trends and short-term prospects
62
Fiscal policy
62
Monetary policy
65
Other aspects of economic policy
67
Recent trends and short-term prospects
67
Conclusions
75
79
LUXEMBOURG
Introduction
I.
II.
III.
83
Overall economic performance
84
Overall macroeconomic performance
84
The restructuring of the productive system
88
Aspects of public finance
90
The acceleration of public spending and the steel crisis
90
The accentuation of tax pressure
92
The maintenance of budgetary equilibrium
92
The recent fiscal policy stance
93
Recent trends and short-term prospects
95
Recent trends
95
Short-term prospects
96
Notes
98
Annexes
I.
Measuring changes in the degree of rigidity of the supply of public
goods
II.
III.
99
Consumption behaviour and public indebtedness
1986) and cross-section data for 16 OECD countries
IV.
101
Model of long-term interest rates estimated from time series (1975-
Chronology of main economic policy measures
Statistical Annex
104
1 09
114
Tables
Text
BELGIUM
1.
Comparative macroeconomic performance
13
2.
Wages and unit labour costs
18
3.
Growth of investment and capital stock in the business sector
20
4.
Breakdown of national income, saving and lending capacity
21
5.
BLEU balance of payments
25
6.
Structure of public expenditure
31
7.
Subsidies and transfer payments to households
32
8.
Structural budget deficit excluding interest payments
33
9.
Trend of real welfare expenditure: demographic effects and generosity
ratio
34
10.
Factors in the growth of unemployment benefit in real terms
35
11.
Implicit price deflator for selected categories of public expenditure
36
12.
Structure of tax revenue
39
13.
Average GNP elasticity of tax revenue
40
14.
Marginal rate of tax on labour
40
15.
Corporate tax rates and tax allowances in 1983
41
16.
Transfers from central government and net lending capacity of local
17.
Financial
1 8.
Apparent interest rate on the debt and current interest rates
47
19.
Fiscal multipliers and private investment
56
20.
Medium-term public debt outlook
58
21.
Budget forecasts
63
22.
Public sector transactions
64
23.
Short-term prospects
72
authorities and the Social Security system
accounts
of
the
institutional
sectors
44
and
structure
financing of the central government financial deficit
of
45
LUXEMBOURG
1.
Structure of output and employment
85
2.
Labour market
86
3.
Central government budget
95
4.
Short-term prospects
97
Statistical annex
BELGIUM
Selected background statistics
1 14
A.
1 15
Gross domestic product
B.
Income and expenditure of households and private non-profit institu
tions
1 16
C.
Income and expenditure of enterprises
117
D.
Government revenue and expenditure
1 18
E.
Labour market
1 19
1 20
F.
Area breakdown of foreign trade
G.
Commodity breakdown of foreign trade
121
H.
BLEU balance of payments
122
LUXEMBOURG
Selected background statistics
1 23
I.
Gross national product
124
J.
Labour force, employment and unemployment
125
Diagrams
BELGIUM
1.
Profitability indicators
19
2.
Corporate income and investment
20
3.
External performance
23
4.
Competitiveness indicators
24
5.
Labour market
27
6.
Total public expenditure excluding interest payments
30
7.
Total general government receipts
38
8.
General government net lending
43
9.
Gross public debt
46
1 0.
Average labour "tax wedge"
49
1 1.
Cost of labour relative to capital
50
12.
External imbalance and interest rate differentials
53
13.
Structural deficit and real long-term interest rate
55
14.
Interest rates
66
1 5.
Prices
68
16.
Exchange rate against selected currencies
70
LUXEMBOURG
1.
Comparative trend of GDP
84
2.
Current balance of payments of Luxembourg
87
3.
General government expenditure and tax revenue
91
BASIC STATISTICS BELGIUM
THE LAND
30.5
Area (1 000 «q. km)
Agricultural area (I 000 sq. km) 1985
Tillage (1 000 sq. km) 1985
Main urban areas (1-1-1986) inhabitants:
13.9
7.2
Brussels
976 536
Antwerp
918 963
Liege
592 732
Ghent
484 299
THE PEOPLE
9 859
Population (1-1-1986), thousands
Number of inhabitants per sq. km
Population, net natural increase per
323.1
0.2
1 000 inhabitant» in 1985
Net migration (1985)
Total labour force (1986, thousands)
Total dependant employment
Agriculture
Manufacturing and construction
Other
-418
4212
3 043
13
952
2 079
PRODUCTION
Gross national product (1986), billions or
Belgian francs
Gross national product per head (1986) US $
5 148.2
11802
15.7
Gross fixed investment: Per cent of GNP (1986)
1849
Per head (1986) US $
Gross national product by origin, at market
prices (1985)
Agriculture
Industry
Construction
Other
%
2.4
23.8
4.8
69.0
THE GOVERNMENT
Current government expenditure on goods
and services (1986), percentage of GNP
Current government revenue (1986) per cent of GNP
51.0
44.8
Government debt, 31-12-1986, billions of
Belgian francs
5 418
Composition of the House of
Representatives:
Socialists
34
Christian-Socials
29
Liberals
23
Vdksunie
7
Others
7
Last elections : 13.12.1987
FOREIGN TRADE
Exports:
Main exports in 1986 per cent of total
exports, SITC (BLEU):
Iron and steel products (67 + 68)
Chemical products (5)
Machinery and apparatus (71 lo 77)
Textile products (65)
Transport equipment (78 + 79)
1 1.7
13.3
1 1.9
6.1
15.7
Imports:
Main imports in 1986, per cent of total
imports, SITC (BLEU):
Iron and steel products (67 + 68)
Chemical products (5)
Machinery and apparatus (71 to 77)
Textile products (65)
Transport equipment (78 + 79)
5.9
10.7
15.0
3.4
13.7
THE CURRENCY
Monetary unit: Belgian franc
Note:
Currency units per US S, average of daily figures:
Year 1986
44.6853
December 1987
34.1878
An international comparison of certain bask statistics is given in an annex table.
BASIC STATISTICS LUXEMBOURG
THE LAND
Area (sq. km)
Agriculture area, 1985 (sq. km)
Woodland, 1985 (sq. km)
2 586
1261
Major city, inhabitants:
Luxembourg (April 1986)
86 200
885
THE PEOPLE
Population (1-1-1986)
Number of inhabitants per sq. km
Population, net natural increase per
I 000 inhabitants in 1985
Net migration 1985
367 200
142
0.2
142
Total employment (1985, thousands)
Agriculture
Industry
161
6.8
53.6
Services
100.6
Dependent employees
Employers, self-employed persons and domestic help
141.1
18.9
PRODUCTION
Gross domestic product (1985), billions of francs
Gross domestic product per head, US S (1985)
241.1
11056
Gross fixed investment:
Per cent of GDP (1985)
Per head, US S (1985)
17.7
1955
Gross domestic product by origin, at
market prices (1984):
Agriculture
Industry, energy
Construction
Other
2.4
39.7
5.8
52.1
THE GOVERNMENT
Public consumption (1985), per cent of GDP
Current government revenue (general government)
(1984), per cent of GDP
Central government debt, per cent of GDP
(December 31st, 1985)
11.5
52.6
12.8
Composition of the Chamber:
Christian Social Party
Workers Socialist Party
Democratic Party
Communist Party
Others
%
39.1
32.8
21.9
3.1
3.1
Last election: 17-6-1984
THE CURRENCY
Monetary unit: Luxembourg franc
Note:
Currency units per US S, average of daily figures:
Year 1986
44.6853
December 1987
34.1878
An international comparison of certain basic statistics is given in an annex table.
LUXEMBOURG
Introduction
Luxembourg's macroeconomic performance has remained highly satisfactory.
Growth was still around the European average and the country's unemployment and
inflation record is among the best in the OECD area. However, the steel industry is
again in difficulty. Luxembourg is not alone in this, but the decline in output seems to
have been more marked in the Grand Duchy than in most of the other European
countries. Moreover, while financial activity is still expanding briskly, the stockmarket crisis has introduced elements of uncertainty. With sectoral problems
exacerbated by the slowdown in foreign demand, growth could well slacken
appreciably in 1988 and
1989. The government's policy of increasing public
investment and diversifying activity, both in industry and in the service sector, is thus
particularly timely.
83
I.
Overall economic performance
Overall macroeconomic performance
Since the beginning of the decade, average annual GDP growth in Luxembourg
has consistently been higher than that of the EC countries as a whole. Luxembourg
compares even more favourably if GDP is measured according to the national
definition, which includes value added in banking up to the amount of costs incurred1
(Diagram 1 ). This achievement is due to the good performance of the financial sector
Diagram 1 .
COMPARATIVE TREND OF GDP
(1980 prices)
1970 = 100
1970 = 100
1170
170 r-
.'
160 -
160
150
150 -
Luxembourg-National definition
1140
V
130
130
y^ -
LuxambourU'lntemational definition
120
120
-110
-100
100
90
i
l
1970
Sources:
I
71
I
72
I
73
1
74
I
75
I
76
I
77
I
78
STATEC; OECD, Annual National Accounts.
84
I
79
I
80
I
81
I
82
1
83
-J 90
L
84
85
Table 1.
Stracturc of output and enptoyneat
Sectoral structure of value added<
Sectoral structure or
at 1980 prices
1970
1980
1986
2.9
2.3
2.3
9.4
6.8
5.4
4.0
27.7
26.4
34.3
32.7
27.5
23.3
Steel
18.0
11.9
10.9
9.0
16.7
15.1
11.2
7.9
Other
17.7
18.1
16.8
17.4
17.5
17.6
16.3
15.4
Market services
Credit and insurance
Other
Non-market services
1.
1975
29.9
Construction
Total
1970
3.7
Industry
of which:
employment
1986
35.7
Agriculture
of which:
1980
1975
7.4
7.8
6.7
5.8
9.5
10.5
10.4
8.7
33.8
40.0
44.6
45.5
36.2
38.9
44.2
50.2
2.5
7.1
10.5
12.7
4.1
5.1
7.1
31.3
32.9
34.1
32.8
33.2
34.8
39.1
43.1
12.8
12.4
11.9
11.1
10.7
11.1
12.5
13.0
100
100
100
100
3.1
100
100
100
100
The difference between the sum of sector figures and the tolal is due to intermediate consumption of imputed banking services, to
VAT levied on goods and to net taxes on imports.
Sources:
STATEC, 1986/87 Statistical Yearbook; and information supplied by the Luxembourg authorities.
and the new industries (Table 1), though the decline in the relative share of steel in
GDP (according to the national definition) was also halted from 1983 onwards.
Unemployment, which was non-existent until the first oil shock, edged up from
1974 onwards to 1.8 per cent of the labour force in 1983, receding thereafter
(Table 2). This is a particularly low rate relative to the European average, even
allowing for the fact that unemployed steel workers assigned to the "Anti-Crisis
Division" (DAC), mainly on training schemes, are not included in the unemployment
statistics. In 1981 as many as 3 620 dependent workers were enrolled in the DAC
- 2.6 per cent of the total dependent workforce - though the number was down to 320
by 1985. These special measures aside, employment has expanded virtually without a
break, except in 1978-79 and 1983, and has tended to accelerate in the 1980s. Hand
in hand with fairly buoyant economic growth, employment in the domestic sector rose
almost 7 per cent between 1980 and 1986. Over the period 1980-1985 it grew by
21.7 per cent in the new industries and by 34.4 per cent in banking. In 1985 these two
sectors accounted for 8.7 and 7.2 per cent respectively of total dependent employ¬
ment in Luxembourg. At the same time, the working-age population was expanding
only slowly because of the low birthrate. Despite an increase, admittedly small, in the
female participation rate, some sectors are experiencing a chronic manpower
shortage met by border and migrant workers. The share of the foreign population in
total employment thus reached 3 1 per cent in 1 986. In banking, the proportion rose
85
Table 2.
1970
Labour market
1975
1980
1981
1983
1982
1984
1985
1986
1987
First half
Yearly average
year
1.
Domestic employment
Dependent workers
Self-employed and family workers
2.
Net border workers
Foreign border workers working in Luxembourg
Luxembourg border workers working outside
Luxembourg International civil servants and
other international organisation staff
3.
National employment (l)-(2)
4.
Unemployed
5.
Labour force (3)+(4)
6.
Unemployment rate (4/5)
Source:
STATEC, Quarterly Bulletin.
140.2
157.5
158.2
158.7
158.3
157.8
158.7
160.9
165.7
168.2
112.6
132.8
137.0
138.7
138.7
138.4
139.5
142.1
146.6
149.8
27.6
24.7
21.2
20.0
19.6
19.4
19.2
18.8
18.5
18.4
4.4
7.5
6.8
6.7
6.7
7.0
7.2
8.4
10.0
11.7
7.7
12.5
13.4
13.8
14.1
14.5
14.9
16.1
18.2
20.0
(-)0.5
(-)0.5
(-)0.5
(-)0.5
(-)0.5
(-)0.5
(-)0.5
(-)0.5
(-)0.5
R0.5
(-)2.8
R4.5
(-)6.l
(-)6.6
(-)6.9
(-)7.0
(-)7.2
(-)7.4
<-)7.7
(-)7.8
135.8
150.0
151.4
152.0
151.6
150.8
151.5
152.7
155.1
156.5
0.1
1.1
1.6
2.0
2.5
2.7
2.6
2.3
2.7
150.1
152.5
153.6
153.6
153.3
154.2
155.3
157.4
159.2
1.0
1.3
1.6
1.8
1.8
1.7
1.5
1.7
-
135.8
0.0
0.0
from 29. 1 per cent in 1 974 to almost 36 per cent in 1 986. Even in steel, the proportion
of foreign workers stood at 38.6 per cent in 1985 against 34.8 per cent ten years
earlier.
In view of the openness of the economy, inflation measured by the consumer
price index closely followed that of Luxembourg's four main trading partners. The
comparative trend in industrial unit wage costs was also moderate, with the index
rising in local currency terms from 100 in 1980 to 105.4 in 1986, against 110.2 in
Germany and 1 32.6 in the EC taken at ten. This creditable performance was in large
part due to the suspension of wage indexation between 1982 and 1984, a fall in
earnings in absolute terms in the steel industry and the slower growth of social
insurance contributions.
Having been in structural deficit since the first oil shock owing to the scale of
energy imports for the steel industry, the trade balance, by and large, ceased to
deteriorate in the 1 980s thanks to a tight incomes policy and a pick-up in foreign
demand for steel products, particularly in 1984 and 1985. The surplus on services, on
Diagram 2.
CURRENT BALANCE OF PAYMENTS OF LUXEMBOURG
LF billion
LF billion
1201-
1 120
-
100
-
60
Balanca on aarvlcee
60
-
40
-
40
Current balance
20
-
20
Trade balance
-20-
-40l
I
1970
Source:
I
71
I
72
I
73
I
74
I
75
J
76
77
STATEC, 1987 Statistical Yearbook.
87
78
I
79
I
80
L
81
J
82
83
84
1-40
85
the other hand, has widened appreciably since 1979 with the expansion of the
financial and banking sector. The surplus on non-factor services too is slightly up
since 1982 as a result of growth in transport services (Luxembourg airport) and
communications (Radio-Television-Luxembourg). All things considered, the current
account surplus, which was already equivalent to 6 per cent of GDP in 1 970, was up
to 33 per cent in 1985 (Diagram 2).
The restructuring of the productive system
The structural adjustment measures introduced in the aftermath of the first oil
shock helped to make this achievement possible. The steel industry, the cornerstone of
the Luxembourg economy until 1 974, embarked in that year on a major restructuring
programme at a time when the other EC producers were still expanding capacity.
While the adjustment effort was initially financed by the steel companies themselves,
from 1980 onwards the government was increasingly called upon to assist the process.
Budget expenditure under the Steel Plan accordingly amounted to 5.4 per cent of
GDP in 1983. The Plan included a 30 per cent reduction in capacity between 1980
and 1 984, financial restructuring and social measures. The number ofjobs (including
those under the DAC) was cut by half between 1 974 and 1 985 and corporate finances
were virtually restored by the end of 1 985. However, the turnaround in world demand
since 1986, growing competition from the newly-industrialising countries and the
slump in selling prices prompted by the dollar's decline and the abolition by the EC of
minimum support prices are jeopardising this improvement and further adjustment
measures will be needed. Negotiations are under way in the European Communauty
concerning the maintenance of a partial quota system and a further reduction in
production capacity, particularly in respect of long products. Decisions should be
taken in these areas by June 1 988. The Luxembourg authorities, for their part, do not
feel that emergency assistance to this sector is warranted, given that its financial
situation is still fairly good.
The adjustment policy actively pursued by the authorities has done much to
boost the expansion of the financial sector and of new industries to take over from
steel. Thanks to flexible tax legislation, the complete freedom of capital movements
and appropriate prudential regulation, the Luxembourg market has developed apace.
With relatively little exposure to the highly-indebted LDCs and particularly active in
the Deutschemark and ECU areas, banks established in Luxembourg have been in a
better position to weather the financial turbulence of latter years than those in other
financial centres. While increasing their provisions for risks, the Luxembourg banks
88
have gradually moved over more to private portfolio management; thus non-bank
deposits, less than 12 per cent of total deposits in 1979, amounted to 26 per cent in
1986. The pace of growth of off-balance-sheet activity may be gauged from the
growth of employment and balance-sheets - which measure traditional intermedia¬
tion-, with the latter increasing by a factor of 14 between 1970 and 1979 and less
than twofold thereafter. At the same time bank employment has continued to expand
rapidly given that the new asset management activities are highly labour-intensive.
Hence, in 1986 the workforce in banking was almost as large as that in the steel
industry. However, this growth may slacken somewhat in the future under the
spillover effect of the liberalisation measures taken by some international financial
centres. But the comparative tax advantage of Luxembourg remains and could even
be strengthened by the reintroduction of withholding tax in Germany. The effects of
the recent financial market crisis are uncertain but, according to the Luxembourg
experts, they will probably be on a small scale, given the particularities of the
Luxembourg financial sector.
The relaunching of a policy of industrial diversification in 1977 is the other
factor in the restructuring of the productive system. This strategy is aimed at making
the Luxembourg economy less reliant on any particular sector, i.e. steel in the past
and banking today. Thus, through public investment incentives and an active policy
of prospecting for opportunities for foreign direct investment, over 70 new ventures
have been established in Luxembourg since 1975, alongside the 200-250 old-style
industrial enterprises. On balance, the jobs created by the new industries since the
1 960s have more than made up for the job losses in steel since 1 974. The depreciation
of the dollar could, however, diminish the appeal of Luxembourg for foreign
investors, particularly American investors. The
1986 frame-law on economic
expansion is nonetheless expected to attract new firms because of the large subsidies
on offer and encourage further sectoral diversification, particularly in telecommu¬
nications services. The possibility of Luxembourg's becoming a flag state is also under
study.
89
IL
Aspects of public finance
The acceleration of public spending and the steel crisis
As in the other OECD countries, the share of aggregate general government
expenditure in GDP (national definition) increased rapidly in the 1970s, from
33.6 per cent in 1974 to 51.3 per cent in 1981 (Diagram 3). In fact, part of this
increase had already taken place by 1975 and in large part reflected the fall in
nominal output - particularly marked in Luxembourg2 because of the importance of
the steel industry - in the aftermath of the first oil shock. Transfers to households
were boosted by the growth of unemployment benefits as a result of declining
employment in the steel industry and by an extension in welfare cover, particularly
sickness insurance. Subsidies and capital transfers also increased after 1 974, with
steel again the main beneficiary. Growth of public consumption was less uneven and
relatively more subdued. The share of the public sector in total employment, which is
among the smallest in the European countries, increased by only 1.3 points between
1 974 and 1 980 compared with a 1 .9 point average rise for Europe as a whole. But
despite its moderation, public sector growth was still deemed excessive once the
economic situation improved. A major package of welfare spending cuts was adopted
in 1982, and in 1984 growth of budget expenditure was pegged to that of nominal
GDP. Thanks to this effort to rein back expenditure - facilitated, it is true, by the
pick-up in activity and the very low level of interest payments, the share of public
expenditure in 1 984 (the latest year covered by the national accounts) was brought
down to 45.7 per cent, a 5'/2 point reduction in three years. This level, some 7 points
below the average for the other EC countries, places Luxembourg in the category of
countries with a fairly small public sector. However, the national accounts data do not
cover all government aid, in particular the very substantial financial assistance to the
steel industry which totalled LF 20 billion over the period 1983-1985, or almost 3 per
cent of GDP each year.
90
Diagram 3.
GENERAL GOVERNMENT EXPENDITURE AND TAX REVENUE
As a percentage of GDP
s
«
28
26
24
24
Trancfafs to houhotdB
22
22
20
20
18
18
16
16
14
14
12
12
10
10
8
8
6
6
4
4
2
2
0
0
13
Social security contribution»
12 -
11
-
10 -
9
-
8
-
6
-
-
6
-_
5
Taxas on corporate profita
5 I
Sources:
I
I
1970
71
I
72
I
73
I
74
I
75
I
76
I
77
I
78
I
79
I
80
I
81
I
82
I
83
OECD, Revenue Statistics of OECD Member countries, 1965-1966 ana Annual National Accounts.
91
L
«4
The accentuation of tax pressure
The growth pattern of income tax and social insurance contributions is fairly
similar to that of expenditure. Up to 1 974 overall tax pressure as a percentage of G DP
increased only slightly (Diagram 3). In the second half of the 1970s it became
appreciably heavier, settling at almost 43 per cent of GDP (national definition)
in 1985. This level was, however, below that of Luxembourg's European partners,
with the notable exception of Germany and Italy. Growth of total direct taxes on
personal incomes and corporate profits, which was particularly steep between 1965
and 1980 owing to increasing contributions from first the steel industry and then the
banking sector, continued thereafter at a more moderate pace. Tax pressure on the
corporate sector nonetheless became heavier until 1983; but from 1984 onwards,
there was a reversal of trend because of the big increase in banks' provisions for risks
which are deductible from profits for tax purposes. Nonetheless, corporate profits tax
accounts for a far larger share of tax revenue than in any other EC country and this
despite a fairly low tax rate. On OECD estimates, the marginal total tax rate
(including social insurance contributions) was 53.6 per cent for a middle-income
dependent worker in 1986; this compares with a marginal income tax rate of 56 per
cent on the highest tax band. These rates are equivalent to or lower than those of the
other EC countries. After increasing fairly steeply in the second half of the 1 970s, the
relative weight of social insurance contributions has levelled off, or even declined,
since 1980 because, while contribution rates were raised in 1982, the growth of total
contributions is curbed by a ceiling mechanism. Moreover, unemployment insurance
benefits are financed primarily by way of a special (solidarity) tax. Thus, since the
early 1980s, central government transfers have tended to account for a growing
proportion of the social insurance institutions' resources: over 30 per cent in the case
of sickness insurance, and probably a third of pension scheme funds by 1990. Taxes
on goods and services have steadily mounted since 1 980, but as a proportion of GDP
they are still lower than the European average. VAT rates, in particular, are
considerably below the Community average.
The maintenance of budgetary equilibrium
Luxembourg has traditionally been extremely cautious in its management of
public finance. Up to 1 978, the budget outturn was positive, enabling the government
to build up reserves on which it was initially able to draw to finance measures to
combat unemployment and assist the steel industry. In 1978 its cumulative reserves
92
amounted to 5.8 per cent of GDP; and this is excluding block appropriations for
special funds (Unemployment Fund, Crisis Fund and the Special Debt Service
Fund). After 1979, however, the government was obliged to have greater recourse to
borrowing and drew on available reserves until they v. ere totally depleted in 1 983. On
a national accounts basis (excluding financial transactions), aggregate general
government net lending was negative only from 1980 to 1982, amounting to -3.1 per
cent of GDP in 1981. In any case, budget deficits were posted only for a fairly short
period, since the authorities decided that it was on the whole preferable to raise taxes
to finance long-term spending and borrow solely to meet short-term spending needs.
The gross central government debt thus began to diminish, from 21.5 per cent of
GDP in 1970 to 7.8 per cent in 1985, one of lowest levels in the OECD area. As a
result, interest payments account for only a very small proportion of the budget
(2.1 per cent of ordinary central government expenditure in 1985). The level of total
public sector net debt is not known, but as a result of the accumulated budget
surpluses, government interest receipts were twice as large as interest payments on
the gross debt in 1984. Thus, in all likelihood general government is a net creditor,
including the social security system which has built up sizeable reserves in
anticipation of an ageing population.
The recent fiscal policy stance
Now that the financial restructuring of the steel industry is complete, the
authorities enjoy greater room for man and the fiscal policy thrust has become
decidedly more expansionary since 1986. Substantial civil service pay increases were
awarded in 1986 and 1987, partly to make up for the 1983 and 1984 austerity
measures. Transfer payments rose as a result of the introduction of a minimum
guaranteed income and a growing central government contribution to the pension
schemes. But the most vigorous expansion was in direct central government
investment and investment via the Funds, particularly in telecommunications.
Altogether, after growing by almost 9 per cent in 1 986, (ordinary) expenditure rose
by around a further 8 per cent in 1987 (Table 3). At the same time, measures were
taken to ease the tax burden: the solidarity tax levied on individuals and businesses
was reduced in two stages (from 10 to 5 per cent and from 4 to 2 per cent),
corporation tax was lowered by 2 points to 38 per cent and income tax scales were
index-linked. Overall, tax pressure eased by the equivalent of 1 per cent of GDP in
1986 and 2 per cent in 1 987 probably, more than in any other OECD country. Despite
these measures, the budget outturn (excluding net public debt repayments) was still
93
Table 3.
Central govenmeat budget
1986
198S
_
...
Expenditure
"
1987
1988
Budget voted
Outturn
Budget voted
Outturn
Ordinary
62.8
63.5
66.8
69.6
72.0
76.0
Extraordinary
10.4
16.1
11.5
12.4
8.2
8.2
72.9
80.3
77.5
82.2
78.9
84.1
1.1
1.1
1.1
0.2
0.6
1.6
0.3
0.3
c .
..
Extraordinary1
Gross budget balance2
Budget voted Draft budget
0.6
-0.2
-0.2
2.7
2.1
1.8
2.2
1.3
Less appropriations to Funds
7.5
2.7
3.5
3.2
2.8
Plus Funds' expenditure
3.2
4.7
3.9
5.2
6.2
6.4
1.9
-0.7
-0.6
-0.3
-1.9
-1.5
-2.1
Net budget balance
Net budget balance (including Funds
less net borrowing)
Net borrowing
1.
Chiefly borrowing.
2.
Including debt service and borrowing.
Source:
Information supplied by the Luxembourg authorities.
in surplus by LF 2.2 billion in 1986, similar in magnitude to the 1985 figure, and is
expected to stay at around this level in 1987. If the Funds' operations are included,
however, budget outturns deteriorated substantially between 1 985 and 1 987, though
the balance was still positive. The surpluses thus achieved provided the resources to
reduce the government debt by the equivalent of almost 1 xh GDP point over the three
years to 1987.
The 1 988 draft budget is broadly similar in thrust to its predecessors, but seems
more cautious. Tax relief is confined to lowering corporation tax by a further 2 points
and raising income tax bands by 6 per cent, so that receipts should grow faster than in
1986 and 1987. Growth of expenditure which is forecast to exceed the medium-term
budget target3, is to be reined back to 5 percent, with continuing brisk investment (up
1 1 % per cent) offset by consumer spending curbs. Overall, the budget surplus will
probably be slightly larger than in 1 987, facilitating the continued pursuit of a policy
of debt reduction. However, this result will partly be achieved by drawing on the
Funds' reserves, so gradually diminishing the authorities' room for manoeuvre. It is
hard, at this stage, to express a view on these budget forecasts. On the one hand, they
should be appraised with due regard to the repeated underestimation of receipts at
this stage of the budget process. But, on the other hand, growth could very well be less
buoyant than has been assumed in these forecasts.
94
III.
Recent trends and short-term prospects
Recent trends
The markedly expansionary thrust of fiscal policy has played a major role in
reviving final domestic demand from 1986 onwards. Monetary policy too has been
accommodating; mortgage rates, in particular, were lowered, making for a strong
upturn in the demand for credit. With the easing of income tax, improved social
insurance benefits and a steep rise in real wage incomes, growth of household
consumption accelerated in 1986 and continued very buoyant in 1987. But it was
above all investment that staged a very strong recovery in 1 986, under the impetus of
increased infrastructure spending by the public sector, continued restructuring in the
steel sector and the launching of major projects in the new industries.
In
manufacturing, investment was probably up 40 per cent in nominal terms between
1985 and 1986. For 1987, business surveys in this sector point to a decline in
investment intentions. Nonetheless, because of the momentum already imparted,
investment is expected to remain buoyant year-on-year and could even accelerate in
the case of civil engineering projects. Altogether, gross fixed capital formation
probably increased in volume by almost 20 per cent in the space of two years. This
outturn must, however, be viewed against the background of the steep fall in
1983-1985, so that in 1987 the level of real investment would probably have simply
returned to its 1982 peak.
The firming of domestic demand in 1986 was accompanied by a pick-up in
industrial production, excluding steel, though it flagged again in the first half of 1 987.
On the other hand, activity in the steel sector, which was strongly up in 1984-1985,
has slackened appreciably in the past two years and in the third quarter of 1987 steel
output was down by one quarter on the two-years' earlier figure. While this decline
occurred in an unfavourable international climate, it was far more significant in
Luxembourg than in the other European countries, suggesting that, despite its
restructuring efforts, the Luxembourg steel industry continues to play a back-up role
relative to that of the other EC countries which makes it more vulnerable to cyclical
fluctuations. With activity declining and selling prices falling faster than production
95
costs, operating outturns are once again negative. The 1987 financial year could show
a loss of around LF 2.5 billion compared with a profit of nearly LF 1 billion in 1985.
The health of the steel industry is thus more fragile than believed eighteen months
ago, even if its international competitiveness seems satisfactory. It is likely that
further cutbacks in capacity and manpower will have to be made.
Growth in most of the other sectors has been strong, particularly in construction
and air transport. Nonetheless, because steel is still such an important sector
(accounting for over one-third of industrial value added), GDP growth slowed to
2% per cent in 1986 and a base 2 per cent in 1987, against an average of around
4 'A per cent over the preceding three years. But if, in line with national definitions, one
adds in financial market activity which is still expanding briskly (with aggregate
balance sheets up 1 0 per cent in 1 986 and almost 1 5 per cent in the twelve months to
August 1987), growth in 1987 was probably still substantially higher than the
European average.
The financial sector has also made a major contribution to boosting employ¬
ment, which expanded very rapidly (up 3.2 per cent for dependent employment in the
first half of 1987 on the corresponding year-earlier period), particularly in banking
(up 12 per cent in the twelve months to June 1987) and construction, but also quite
substantially in industry excluding steel. Outstanding job applications nonetheless
increased appreciably, mainly owing to the large number of new registrations by
jobseekers seeking to benefit from the minimum guaranteed income scheme
introduced at the beginning of 1987. Despite this increase, the unemployment rate
did not go above 1 .7 per cent in the first half-year and pressure in the labour market
remained strong. This probably had the effect of speeding up the wage increases
awarded under collective bargaining agreements. Civil service pay awards were also
sizeable. All things considered, real per capita gross wages grew by 4 per cent in 1 986,
after remaining virtually flat for five years, and a similar rise is expected for 1987.
Despite faster growth of unit labour costs, the rise in prices as measured by the
consumer price index was negative in 1 986 (running at -1 .5 per cent) and nil in 1 987.
However, underlying inflation, excluding oil products, was probably around 2 per
cent.
Short-term prospects
The outlook appears even more uncertain than usual. It is indeed hard, at this
stage, to gauge what the impact of the stockmarket crisis will be both on the overall
economic situation of the OECD countries and on activity on the Luxembourg
96
Table 4.
Short-term prospects'
1982 Current prices
Billion
LF
Annual change
vo|un>«)
%
1986
1987
\m
1919
of GDP
Private consumption
95.8
60.3
3.3
3.5
2.5
2.Q
Public consumption
26.1
16.4
1.9
1.5
M
1-?
Gross fixed capital formation
40.0
25.2
15.8
3.5
2.0
1.0
161.9
102.0
5.7
3.2
2.3
1.6
0
0
-5.8
0.2
0.1
6
161.8
102.9
-0.9
3.3
2.4
1.5
-3.0
-1.9
3.2
-1.3
-1.4
-ft?
Final domestic demand
Change in slockbuilding
Total domestic demand
Change in foreign balance
Exports of goods and services
141.1
88.9
4.2
2.0
1.5
1»
Imports of goods and services
144.1
90.8
0.5
3.5
3.0
2.5
158.8
100.0
2.9
1.8
1.0
09
GDP
Unemployment rate
1.5
1.6
1.6
16
Consumer prices
0.6
1.0
i-7
l=s
-
1.
According to SNA definitions.
Source:
OECD Secretariat.
financial market. Furthermore, developments in the steel industry are very largely
contingent on decisions to be taken at a Community level. The projections, given here
are therefore conditional. However, growth may well prove to be fairly sluggish in
Luxembourg's main European trading partners, and at the same time the stimulus to
the domestic economy imparted by fiscal policy seems bound to tail off.
Given the general climate of uncertainty, wage growth is likely to slacken.
However, a good many collective wage agreements signed in 1 987 were for increases
phased over two years, so that the deceleration of households' income and
consumption should be only gradual. In view of the deteriorating financial position of
the steel industry and the slowdown in foreign investment as current programmes are
completed, the decline in investment could, on the other hand, be appreciable. Final
domestic demand growth could thus be down to around 2 per cent, roughly on a par
with the European average. Since the contribution of foreign trade (excluding
financial services) to growth may well remain firmly negative, primarily because of
the adverse repercussions of the dollar's recent depreciation, GDP is unlikely to grow
by more than 1 per cent in real terms overall. While remaining positive mainly owing
to the expansion of employment in financial services, employment growth may thus
be expected to slow. With wages continuing buoyant, at least in 1988, and growth
slowing, unit labour costs could accelerate somewhat. Nonetheless, there would seem
to be very little risk of a fresh and substantial surge in inflation.
97
Notes
1.
In view of the importance of banking in Luxembourg, how it is treated statistically has
major implications for the measurement of GDP. In 1 985 the National Statistics Institute
adopted a method, which consisted in considering part of the "imputed banking service
charge" as final (and foreign) consumption, whereas the standardised international
definitions treat it as intermediate consumption. The total banking sector output is
computed using the costs incurred method. Allowance for banking value added is
particularly necessary in analysing tax pressure, in view of the volume of tax revenues
based on earnings by this sector. The question of definition is also important in analysing
fiscal policy since public expenditure must conform to a growth norm set with reference to
GDP.
2.
Nominal GDP declined by 4 'A per cent on national definitions and by Vk per cent on
standardised definitions, against average EC growth of 1 1 'h per cent.
3.
This is based on the assumption that expenditure should not grow faster than real GDP,
increased by the rise in the wage escalator. In 1988, the official forecasts were based on
real GDP growth of 2'k per cent and a similar increase in the wage escalator.
98
Annex I
Measuring changes in the degree of rigidity of the supply of public goods
The growth in the share of public expenditure in GDP during the 1960s and 1970s was
marked in numerous countries by a high degree of rigidity. The relative autonomy of public
expenditure with respect to changes in the macroeconomic environment can be explained by
supply factors (the fact that the demand for public goods is not expressed in a market; that
government departments seek to expand in accordance with their own internal growth
objectives; electoral considerations; countercyclical policy).
The autonomous character of the growth of the public sector (CG) in GDP can be
represented by the following very simple model:
[1]
log (CG/GDP) = a+b log (CG/GDP) (-1)
Parameter b measures the degree of inertia of the public sector. An interesting special
case is when b = 1 and a > 0: the share of the public sector increases at the rate a. This crude
model can be refined by adding two other variables. The first variable (GAP) captures cyclical
fluctuations in GDP and thus in CG/GDP; it can also give an approximate measure of the
expansionary effect on public spending of the government's response to a deterioration in the
economic situation. The second variable (TCVP) is the growth in the per capita standard of
living and captures the influence of the constraints on the financing of public spending,
assuming that the willingness with which the taxpayer accepts the increased tax pressure
accompanying the growth in public services depends on whether the rise in the standard of
living is accelerating or decelerating.
[2]
log (CG/GDP) = a+b log (CG/GDP) (-1) + c GAP + d TCPV
where b > 0, c> 0 and d > 0.
GAP and TCPV were found to have a significant positive influence over the entire
estimation period (1964-1985), with GAP defined as the absolute year-on-year change in
available margins of production capacity and TCPV as the growth in per capita private
consumption lagged by two periods.
The relationship [2] is not stable. Prior to 1 98 1 (Table 1 ), d is not statistically significant
and b does not differ from 1; the share of the public sector grew autonomously. Also, the
coefficient c, which measures the influence of countercyclical policy, is higher and statistically
more accurate. When the estimation period is extended, the highly autoregressive character of
99
the growth of the public sector diminishes somewhat, while the influence of changes in the
standard of living becomes more important.
Table 1 .
Coefficients of explanatory variables for the supply of public goods
Constant fCC/GDP)(-\)
-0.106
1964-1985
(1.2)
0.946
(2.2)
0.76
(17.9)
(2.9)
SEE
R*
0.028
0.94
1.46
1.26
0.026
0.95
2.08
-0.26
DW
(2.4)
0.012
1.007
(0.2)
TCPV
0.009
(17.5)
0.02
1964-1981
CAP
0.26
(0.6)
Definition:
CG
Production of public goods and services (public consumption at current prices).
GDP
=
Value of Gross Domestic Product.
GAP
-
Absolute change (/ minus /-I) in the ratio of potential GDP (estimated by joining up the cyclical peaks) to observed
TCPV
=
GDP.
Rate of growth over the period t-2 in the volume of per capita private consumption.
This progressive shift in the coefficient takes place only from 1981 onwards (Table 2),
indicating that the change in fiscal stance indeed reflects a new government behaviour on the
part of government rather than a "typical" response which may already have been observed in
the past to changes in the macroeconomic context.
Table 2.
Shift in the coefficients of equation [2]
over the estimation period
Value of coeflicienls
Estimation period
from 196410...
*
a
c
d
... 1972
0.41
1.26
0.017
-0.68
1975
0.14
1.06
0.023
-0.45
1977
0.01
1.00
0.014
0.22
1979
0.02
1.00
0.014
0.27
1980
0.06
1.02
0.013
0.25
1981
0.02
1.01
0.012
0.26
1982
-0.05
0.97
0.011
0.45
1983
-0.09
0.96
0.009
0.79
1984
-0.11
0.95
0.009
0.84
1985
-0.11
0.95
0.009
0.76
100
Annex II
Consumption behaviour and public indebtedness
According to Barro's hypothesis ( 1 974), households anticipate a future rise in taxation to
finance the accumulated public debt burden, and offset public dissaving exactly by their
saving. In other words, the additional net income derived from public deficits by private
economic agents is presumed not to give rise to any consumption expenditure. This theory of
the neutral effect of public debt on intertemporal consumption choices is based on excessively
restrictive assumptions: that an individual knows his lifespan with certainty; that the present
generation has an altruistic attitude towards succeeding generations; perfect capital markets;
the absence of tax distortions. It is not surprising that most of the tests conducted to date have
led to the rejection of this extreme hypothesis. However, these tests say nothing about the
degree of offset which, although obviously not full, may not be nil. The following econometric
analysis attempts to determine the degree to which private economic agents regard the stock
of their claims on the government, and public expenditure that is not covered by tax revenue
- i.e. the budget deficit - as an integral part of their wealth and income respectively.
For this purpose, a model of consumption behaviour based on the life-cycle hypothesis
was estimated. The model relates the desired level ofper capita private consumption (C) to the
anticipated intertemporal pattern of present and future earnings throughout the life-cycle of
households, in such a way that the proportion of consumption to wealth at present value is
maintained at an optimal level; this proportion may change, depending on the real interest rate
(IRLRE). At the individual level, the proportion varies inversely with age; at macroeconomic
level, it may be assumed to be roughly constant provided that the age distribution of the
households is not too unstable. Present-value wealth consists of the wealth accumulated
during the previous period (WT), plus the current disposable income as "perceived" by
households (YD) and the post-tax discounted value of future earned income (YT) as
"perceived" by households. The explanatory variables are, theoretically, expected values but,
as data are not available for expected values, they are assigned their current value. Using
Theil's consumption function specifications (1980), and a number of approximations, the
model can be written as follows [Nicoletti (1987); Bank of Italy (1986)]:
[1]
Log(C/C(-l)] = aO+fll IRLRE + a21og[r*T(-2)/C(-l)]+a3
log[YD(-\)/WT(-2)} + a41og[K77}TH)]
The key question is how the "perceived" income variables WT, YD and YT should be
defined. Let:
101
WT = W + [\-ad]B
YD= Y+ a6[T- G] - a5 [l-a6] PE.B(-\)
YT= Y-RB + a6[T- G + RB]
where:
W
=
Households' assets excluding public debt;
B
-
Net public debt;
Y
=
Disposable income on a national accounts basis;
T-G
=
Public deficit, i.e. taxation (T) minus expenditure (G);
PE
=
The inflation rate;
RB
=
Interest earnings on the public debt.
The parameters ad and a5 measure respectively the degrees of fiscal and money illusion.
When a6 = 1 (the ultrarational hypothesis), households subtract their holdings of govern¬
ment securities from their assets because they expect the government to levy a tax at a future
date to finance the public debt. Likewise, they exclude entirely the public deficit from their
disposable income. When a5 = 1, households take account of the fall in value of their
government securities (B) as a result of inflation insofar as they regard B as a part of their
wealth, i.e. in a proportion (1 -ad).
Given the problems in estimating a5 and ad due to the non-linear character of the
specification [1], they were obtained by scanning simultaneously with the estimate of the
other coefficients using the ordinary least squares method. The values chosen for a5 and ad
correspond to the adjustment that minimises the sum of the squared values of the residuals.
For the non-zero values of a5 and ad, additional tests for linear restriction (Fisher test) were
carried out in order to check whether the ad ¥= 0 and a5 # 0 hypothesis should be rejected.
The "best" estimate results for Belgium are as follows (Nicoletti, 1987):
Table 1 .
Coefficients of the variables in equation [1]
estimated from 1961 to 1985
1.
SEE
R2
DW
0.01 1
0.72
2.45
Obtained by scanning simultaneously at
a\
oO
-0.08
0.04
(-10)
(0.3)
a2
o3
0.39
(4.3)
fl4
0.36
0.51
(3.9)
(5.5)
<j5'
a6'
1
0.5
(-)
(-)
intervals of 0.1.
The results would indicate that the degree of money illusion of Belgian households is very
low
(a5 = 1)
and
that
their saving compensates
(ad = 0.5).
102
for only half of public dissaving
References
Bank of Italy, "Modello trimestrale dell' cconomia italiana", No. 80, December 1986;
R. Barro, "Are Government Bonds Net Wealth?", Journal of Political Economy, 1974;
G. Nicoletti, "The impact of Inflation on Private Saving and the 'Debt Neutrality' Hypothesis"
Working Paper of the OECD Economics and Statistics Department, January 1988;
H. Theil, The System Wide Approach to Microeconomics; Basil Blackwell, Oxford, 1980.
103
Annex III
Model of long-term interest rates estimated from time series (1975-1986)
and cross-section data for 16 OECD countries
In a closed economy and in equilibrium, the nominal long-term interest rate (denoted as
1RL) is assumed to derive from the "golden rule" which states that the real interest rate [IRL
less expected inflation (denoted as PE)] and real potential growth (denoted as GPOT) must
equate.
[1]
IRL = PE + GPOT
The interest rate may depart temporarily from its equilibrium value when subject to a
number of pressures. Thus, it is assumed that, when the proportion (denoted as DEE) of
available private saving drained off by the government borrowing requirement exceeds an
optimal proportion (which is not necessarily zero), the interest rate is subjected to upward
pressures in the capital market. Likewise, if the anticipated share of public debt (denoted as
DT) in GDP (in this case a proxy for the wealth held by private economic agents) is above its
optimal level (which is not necessarily zero), the interest rate must be made more attractive on
account of the risk of monétisation of the debt and agents' reluctance to increase the share of
government securities in their desired portfolio. It is also possible that the size of the public
sector in the economy (denoted as PUB) affects the composition of private saving. In countries
in which the public sector is comparatively large, replacement income is more important; there
is less non-monetary saving to provide against periods of inactivity, and thus a larger rise in
interest rates than elsewhere may be required to cover the government borrowing requirement
by long-term saving. Assuming that the influence of these additional variables is linear, the
model can then be written as:
[2]
IRL = PE + GPOT + a (DT-DSTAR) + b (DEF-DEFSTAR) + d (PUB-PUBSTAR)
where DSTAR, DEFSTAR and PUBSTAR are respectively the optimal levels of DT,
DEF and PUB, assumed to be constant.
In an open economy, the external constraint can also have an effect. In response to an
external imbalance, countries committed to exchange rate stability may find themselves
obliged to raise the short-term interest rate and, after some time, long-term rates, in order to
support their currency. Lastly, in those countries in which domestic and foreign assets are
readily substitutable, and in which the exchange rate does not adjust instantaneously to
marginal capital movements, foreign interest rate (denoted as IUS) fluctuations are passed on
to domestic rates. The general model then becomes:
104
[3]
IRL = c + PE + GPOT + aDT + bDEF + dPUB + eCUR + flUS
where c = -aDSTAR - bDEFSTAR - dPUB, a>0, b<0, d>0, e<0,f>0.
In order to secure a sufficient number of degrees of freedom in the estimates, especially
for the small countries for which the runs of data are often short, the above models were
estimated from pooled data for 16 countries (or 15 countries when the United States was
excluded from the sample) relating to the period 1975-1986 (all told, 192 or 180 observations
respectively). The rationale behind introducing this spatial dimension is also to reduce the
scale of possible multicollinearity between the explanatory time variables (within the same
country), and thus the instability of the estimated coefficients. The current balance variable
was divided by the level of GDP as a scale factor. After various tests, the DT, PUB and DEF
ratios were taken as the average five-year ratios centred on the current year (the values for
1987 and 1988 are the forecasts in the OECD Economic Outlook, June 1987); they are thus
adjusted for short-term cyclical effects. Expected inflation is assumed to be equal to the
current inflation rate.
The equations were estimated using the ordinary least squares method; the first-order
time-series autocorrelation for each country was corrected using Kmenta's method. The
results are set out in Table 1 .
Table 1 .
Regressions on pooled data adjusted for autocorrelation of residuals
/-statistics in brackets
Coefficients of variables
Con
stant
PE
GPOT
DT
DEF
LDT
PUB
CUR
IUS
SEE
Models without IUS
(16 countries)
A.l
A.2
B.
0.516
0.462
1.564
(3.16)
(12.43)
(5.90)
0.213
0.377
0.147
(1.37)
(10.30)
(0.50)
0.094
(0.6)
0.28
(1.87)
-0.071
(-2.69)
-0.030
_
-0.059
1.862
(-2.40)
(6.67)
-
_
-
-
1.359
(-0.45)
-0.076
-
1.232
(-1.3)
0.374
0.420
-0.045
0.152
-0.050
(10.69)
(1.60)
(-2.56)
(7.49)
(-0.87)
1.192
Model with IUS
(15 countries, i.e.
excluding the
United States)
C.
-
0.329
(11.76)
0.140
-0.045
-
(0.69)
-
(-3.12)
0.069
-0.053
0.433
(4.00)
(-1.04)
(7.76)
Definition of variables
Dependent variable:
long-term interest rate on government bonds;
PE:
Current rate of increase in the consumer price index;
GPOT:
Potential GDP growth rate estimated by joining up the peaks of the cycles;
DT:
Five-year average (1-2 to 1+2) of gross public debt/GDP;
LDT:
Log of DT;
DEF:
PUB:
CUR:
IUS:
Five-year average (t-2 to 1+2) of the government borrowing requirement/domestic private saving;
Five-year average (r-2 to /+2) of public expenditure excluding intcresl/GDP;
Current account balance divided by GDP;
Long-term interest rate on US private bonds (AAA Corporate Bond Rate).
105
1.033
In the four equations in Table 1, the inflation term has a coefficient that is highly
significant but less than 1 . It is probable that the other variables, in particular the fiscal
pressures represented by DEF, influence the formation of price expectations and thus that
they partly capture the influence of inflationary expectations. The very large impact of
potential growth in equation A. 1 is cancelled in equations A. 2 and B by the introduction of the
public debt in log form, or the size of the public sector as an explanatory variable. This may
suggest that their optimal level is not constant, but that it is positively correlated with potential
growth. When it is assumed to be linear, the influence of public debt is barely significant in
equation A. 1 . But when the log of DT is taken, it becomes statistically much more significant.
In doing so, it is thus assumed that the same increase in debt has an influence on the interest
rate that is still positive but all the smaller in that its level is high. It is reasonable to consider
that countries with a large public debt have relatively highly developed capital markets that
facilitate the issue of government securities. However, this influence ceases to be significant
when the public sector variable, with which the level of debt is highly correlated, is added. The
specific explanatory power of this variable thus seems more robust. The debt variable was
eliminated from the equations B and C. Note also that the constant approaches zero; it was
not therefore retained in equation C.
According to equation C, the foreign interest rate variable, represented by the US
interest rate, reduces the value of the coefficients of PUB, GPOT and the inflation term. The
US interest rate and those of the other OECD countries are determined by certain common
variables (expected inflation, potential growth rate). Given the importance of the United
States in price and growth transmission mechanisms, it is inevitable that the long-term US
interest rate captured part of the effects peculiar to domestic variables. Lastly, note that
although it bears the correct sign, the influence of the current balance is never significantly
different from zero. It is possible that the use of the same impact coefficient for all countries is
an excessive constraint that does not fit the data, given the diversity of the national exchange
rate policies observed over the estimation period. To ease this constraint, the CUR variable
was subdivided into 1 5 independent vectors (corresponding to the 1 5 countries in the sample),
and the value 0 was assigned to all countries except the country under consideration. When the
CUR variable in equation C is replaced by these 1 5 current account vectors, coefficients for
the specific national impact of the current balance on the domestic interest rate are
simultaneously obtained. The results are shown in Table 2.
The current balance has a real influence, and with the correct negative sign, in only three
countries which are precisely three European countries that belong to the European Monetary
System, while the net capital inflow corresponding to the current account deficit would seem
to ease domestic lending rates in Sweden and Norway. The absence of any impact of the
current years' current balance on long-term interest rates in Belgium is somewhat surprising,
but it can be explained by the fact that the impact is essentially short-term and affects mainly
the money market rate.
The differences in the structure of capital movements and in the degree of stability of
exchange rates across countries also suggest the possibility that the US interest rate has a
varying effect on individual countries. Thus, the same exercise as above was performed with
the IUS variable. The strong influence of the US rate in the case of Canada reflects the
106
large-scale capital movements between the two countries. Leaving aside the case of Spain,
which is difficult to explain, the influence of the US interest rate is generally smaller in the
other countries, with Belgium in an intermediate position.
Table 2.
Regressions on pooled data (equation C in Table 1)
with country-specific variables
(adjusted for time-series autocorrelation of residuals)
Coefficients of country-specific variables
Current ballance
Foreign interest rate
Japan
NS
0.18
(5.4)
Germany
NS
0.28
(4.1)
France
NS
0.36
(6.6)
United Kingdom
NS
0.49
(7.0)
0.44
(7.2)
Italy
-0.45
(-2.0)
Canada
NS
0.85
(9.0)
Australia
NS
0.13
(4.7)
Austria
NS
0.09
(2.6)
Belgium
NS
0.22
(3.8)
Denmark
-0.29
(-3.1)
NS
Spain
Finland
NS
Netherlands
0.21
(5.5)
0.57
(10.1)
0.27
(6.7)
NS
-0.31
(-2.6)
Norway
0.01
(2.0)
0.15
(4.9)
Sweden
0.42
(2.1)
0.18
(3.2)
Note: NS « not significant; /-statistics in brackets.
On the basis of the coefficients in equation C in Table 1 , the contribution of the various
factors to changes in the long-term Belgian interest rate can be calculated. Two periods were
examined in particular: 1979-1983 and 1983-1986. For the first period, the model simulates a
rise of 2.78 points in the interest rate, nearly a third of which is ascribable to changes in the
budget deficit and in public expenditure, and more than a third to the foreign interest rate and
to inflation respectively. For the second period, the model simulates a fall of 4.47 points in the
Belgian interest rate, three-quarters of which are ascribable to disinflation and to the fall in
the US interest rate, and the remainder to the improvement in public finance and, to a lesser
degree, to the relatively strong performance of the current balance.
Table 3.
Contributions of the explanatory variables to the estimated change
in the long-term Belgian interest rate
Equation C in Table 1
PE
GPOT
DEF
PUB
CUR
Change 1983-1979
3.19
-0.65
-11.4
5.67
2.28
2.41
Contribution
1.05
-0.09
0.51
0.39
-0.12
1.04
2.15
-3.02
Change 1986-1983
-6.4
0
16.5
-3.12
Contribution
-2.1
0
-0.74
-0.21
107
-0.11
IRL
IRL
observed
estimated
IUS
-1.31
2.10
-
-3.90
-
_
2.78
-
-4.47
Reference
P. Muller and R. Price, Public Sector Indebtedness and Long-term Interest Rates, OECD, paper
presented at the Brookings Institution/World Bank Conference, Washington, September 1 984.
108
Annex IV
Chronology of main economic policy measures
BELGIUM
MONETARY POLICY
April 1986
Official discount rate lowered from 9.75 per cent to 8.75 per cent.
May 1986
Discount rate lowered to 8.0 per cent.
January 1987
Realignment within the EMS: 2 per cent revaluation of the central rate of the Belgian
franc.
May 1987
Discount rate lowered to 7.75 per cent.
July 1987
Discount rate lowered to 7.25 per cent.
FISCAL POLICY
May 1986
Fiscal consolidation plan providing for savings of BF 195 billion during fiscal 1987. Main
measures adopted under the plan were:
-
The self-employed and wage-earners no longer allowed to draw their pension before
the age of 60, and the pension age set at 65 for both men and women;
109
In the education sector, cuts in jobs, school building expenditure, subsidies, operating
appropriations and school transport;
In the employment and labour sector, changes in the mode of calculation of
employment benefit by the introduction of new categories, as a result of which certain
other categories of the unemployed excluded from benefits;
Reduction in certain sickness and invalidity benefits, and a programme to cut the
number of hospital beds;
A reduction in interest payments in 1987 by rescheduling the debt through financial
intermediaries;
Abolition of various forms of tax relief for businesses (inter alia co-ordination
centres).
GENERAL POLICY
June 1986
Price controls eased: small and medium-sized enterprises with a turnover not in excess of
BF 30 million henceforth exempted from the obligation to announce price increases, with the
exception of a few sectors.
September 1986
Joint industrial agreement making possible a return in 1987 to free bargaining of real
wages; the government reserves the right to intervene in wage formation should unit output
costs in Belgium rise more rapidly than in the main competitor countries.
November 1986
Plan to promote employment under which employers' social insurance contributions to
be cut between 1987 and 1992 in respect of young people or long-term unemployed hired
in 1987.
LUXEMBOURG
November 1986
Creation of a National Solidarity Fund and a minimum guaranteed income.
December 1986
Act reforming certain direct and indirect tax provisions (tax relief measures).
Finance Act setting out the government's revenue and expenditure plans for 1987. The
total budget deficit set at LF 154 million.
110
January 1987
Realignment within the EMS: 2 per cent revaluation of the central rate of the
Luxembourg franc.
July 1987
Act on old age, invalidity and survivors' pensions. The Act contains a general reform of
the various Acts that currently govern private sector pension schemes, with a view to creating
a single insurance scheme covering manual and non-manual workers, shopkeepers and
tradesmen, industrialists, farmers and professionals. It includes a series of structural and
selective measures together with a 7 per cent increase in all private sector pensions.
September 1987
Draft Finance Act for 1 988. Total revenue up by 5.8 per cent and total expenditure up by
4.9 per cent on the final 1987 budget.
Ill
UJ
CD
<
û.
<
0Û
STATISTICAL ANNEX
Belgii
- Selected background statistics
W7-86
Per cent changes from previous year
Private consumption1
Gross fixed capital formation1
1977
l978
l979
198°
1981
1982
1983
1984
1985
1986
1.7
2.4
2.5
4.8
1.8
-0.5
1.7
-1.3
1.5
1.9
-1.0
0.1
2.6
-2.6
4.6
-16.2
-1.9
-A3
2.2
1.1
6.5
Public investment'
-4.2
0.9
-2.4
5.2
8.7
-5.7
-8.8
-6.7
-10.4
-12.3
-9.0
Residential1
-5.9
1.8
6.1
-13.1
-1.2
-40.9
-6.5
-2.8
-0.5
4.5
4.8
2.5
-1.4
2.0
2.9
6.8
-4.9
2.6
-4.0
7.3
3.8
10.9
GDP1
1.6
0.6
2.9
2.2
4.1
-1.3
1.5
0.1
2.0
1.4
2.4
GDP price deflator
5.3
7.5
4.4
4.5
3.7
5.1
7.1
5.8
5.2
5.5
3.8
1.0
1.1
Non-residential1
Industrial production
Employment
Compensation of employees (current prices)
Productivity (GDP/employment)
Unit labour costs (compensation/GDP)
2.7
-0.1
2.0
4.8
-1.3
-2.6
0.1
1.8
2.7
1.5
-0.2
-0.2
0.0
1.2
-0.1
-2.0
-1.3
-1.0
0.0
0.7
1.0
6.3
8.6
7.3
6.5
9.5
4.3
6.3
4.5
5.8
5.4
4.8
1.8
0.8
2.9
1.0
4.2
0.7
2.8
1.1
2.0
0.7
1.4
4.6
8.0
4.3
4.2
5.2
5.7
4.7
4.4
3.7
3.9
2.3
18.4
Percentage ratios
Gross fixed capital formation as % of GDP
at constant prices
Stockbuiding as % of GDP at constant prices
Foreign balance as % of GDP at constant prices
Compensation of employees as % of GDP
at current prices
Direct taxes as percent of household income
Household saving as percent of disposable income
Unemployement as percent of civilian labour force
c.
21.6
20.6
20.7
17.5
16.9
16.2
16.2
16.2
16.8
0.3
0.3
0.8
0.8
-0.2
0.2
-0.5
0.1
-0.3
0.1
0.1
-3.1
-3.3
-4.6
-2.8
0.4
1.0
3.4
57.2
58.2
58.1
58.2
59.0
59.2
57.9
14.9
13.9
15.0
15.3
14.8
14.4
15.5
15.0
16.6
16.6
14.9
16.2
16.4
10.0
6.6
7.1
7.3
7.7
-1.3
-0.6
-0.8
-3.0
3.4
3.5
2.6
57.1
56.3
55.6
54.7
14.8
15.1
15.1
14.6
14.0
15.3
13.7
12.0
14.3
10.0
11.7
12.9
13.0
12.0
11.4
-4.2
-2.4
-0.4
-0.1
0.7
3.1
Other indicator
Current balance (billion dollars)
I.
21.7
0.1
At constant 1980 prices.
Source:
OECD.
Table A.
Belgium - Gross domestic product1
Frs. billion
1978
1979
1980
1981
1982
1984
1985
1986
Current prices
2 224.5
2 390.3
2 616.5
2 753.8
2 962.8
3 176.8
3 297.8
544.0
588.1
643.6
702.8
740.6
761.3
799.7
852.4
881.3
646.9
661.5
728.4
644.1
671.3
670.0
709.6
743.2
806.6
7.3
25.8
27.5
-5.4
6.6
-27.5
-3.3
-21.0
-9.1
Total domestic demand
3 087.8
3 332.4
3 623.9
3 731.8
4 035.0
4 157.6
4 468.8
4 751.4
4 986.6
Exports of goods and services
less: Imports of goods and services
1
540.0
1 797.6
2 026.4
2 283.9
2 637.3
2 920.2
3 332.1
3 466.7
3 360.5
1 570.4
1 865.5
2 124.7
2 357.2
2 693.8
2 862.5
3 275.5
3 375.1
3 188.9
Gross domestic product at market prices
3 057.4
3 264.5
3 525.7
3 658.5
3 978.5
4 215.3
4 525.4
4 843.0
5 148.2
Private consumption
1 889.6
Public consumption
Gross fixed capital formation
Change in stocks2
2 057.0
1980 prices
2 084.4
2 184.3
2 224.5
2 214.2
2 252.6
2 222.2
2 254.7
2 296.5
2 358.0
617.0
633.6
643.6
651.3
641.2
640.5
642.8
654.9
660.2
714.9
696.6
728.4
610.7
598.8
573.0
585.5
591.7
630.4
7.4
27.9
27.5
-8.3
5.4
-17.3
5.2
-9.9
2.9
Total domestic demand
3 432.7
3 542.4
3 623.9
3 467.9
3 498.0
3 418.4
3 488.2
3 533.2
3 651.5
Exports of goods and services
less: Imports of goods and services
1 831.5
1 961.4
2 026.4
2 088.6
2 134.0
2 201.6
2 327.6
2 355.4
2 487.5
1 941.2
2 118.3
2 124.7
2 075.2
2 098.2
2 082.1
2 206.4
2 228.1
2 390.8
Gross domestic product at market prices
3 314.0
3 385.6
3 525.7
3 481.3
3 533.8
3 537.8
3 609.4
3 660.5
3 748.3
Private consumption
Public consumption
Gross fixed capital formation
Change in stocks2
1.
Includes a statistical discrepancy.
2. Includes adjustment in connection with gross fixed capital formation.
Source: Belgian National Accounts.
Table B.
Belgium - Income and expenditure of households and private non-profit institutions
Frs. billion, current prices
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
2 814.7
1 657.4
1 777.7
899.2
2 078.8
2 167.6
2 303.1
2 407.5
2 547.6
2 685.9
Income from firms received by individuals
362.4
384.8
390.2
397.1
410.0
435.5
465.5
493.3
517.0
562.1
Household property income
306.1
336.2
377.7
434.6
502.8
585.8
654.2
759.8
839.6
919.9
Current transfers from government
568.9
622.0
680.5
734.6
825.0
889.2
959.6
1 010.4
1 049.9
1 090.4
15.8
18.5
18.2
20.9
24.0
27.0
29.3
31.4
36.5
32.8
Compensation of employees
Current transfers from the rest of the world
Household income
1
2 910.6
3 139.2
3 365.8
3 666.0
3 929.4
4 240.6
4 516.1
4 842.5
5 128.9
5 419.9
Direct taxes
406.0
471.9
516.3
541.9
567.7
655.4
668.6
732.0
772.4
790.6
Social security contributions by wage-earners
and self-employed
361.3
377.5
405.3
437.7
464.7
505.2
557.5
635.0
701.3
741.4
22.3
24.2
28.0
31.8
39.3
38.0
38.5
41.4
43.9
38.4
Disposable income
2 121.0
2 265.6
2 416.2
2 654.6
2 857.7
3 042.0
3 251.5
3 434.1
3 611.3
3 849.5
Household savings
352.1
375.9
359.3
430.1
467.4
425.5
497.7
471.3
434.5
551.7
less:
Current transfers to the rest of the world
Sources:
Statistical Yearbook ofBelgium -Vol. 106. 1986 éd.. National Institute of Statistics; Documentation sur la situation conjoncturelle. 1987. Research and Documentary- Service of
the Ministry of Finance.
Table C.
Belgium - Income and expenditure of enterprises
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
Billion francs
1.
Gross operating surplus before subsidies
2.
Subsidies
3.
4.
5.
Gross operating surplus (1+2)
Net properly income payable
Gross primary income (3 -4)
6.
7.
Current transfers paid to government
Disposable income : (5-6)
310
318
342
358
331
406
545
647
754
40
47
56
50
55
53
59
67
68
858
74
350
408
386
459
604
714
822
932
365
398
74
57
65
79
60
57
155
193
210
198
276
308
333
329
326
402
449
521
612
734
76
82
92
89
87
113
114
133
148
157
200
226
241
240
239
289
335
388
464
577
43
56
59
99
131
128
144
118
144
119
243
282
300
339
370
417
479
506
608
696
8.
9.
1 0.
Capital transfers received
Capital resources (7 + 8)
Gross capital formation
254
261
298
335
304
348
313
378
390
450
11.
Net lending (9- 10)
-11
+21
+2
+4
+66
+69
+ 166
+ 128
+218
+246
12.3
11.9
12.2
11.7
10.7
11.7
14.5
15.9
17.1
18.2
7.0
7.4
7.4
6.9
6.6
7.3
8.0
8.6
9.6
11.2
8.5
9.2
9.3
9.7
10.2
10.6
11.5
11.2
12.6
13.6
Percentage of GNP
Gross operating surplus
Disposable income
Capital resources
Gross capital formation
Net lending
Source:
National Bank of Belgium, 1986 Report.
8.9
8.5
9.2
9.6
8.4
8.8
7.5
8.4
8.1
8.8
-0.4
+0.7
+0.1
+0.1
+ 1.8
+1.8
+4.0
+2.8
+4.5
+4.8
Tabic D.
Belgium - Government revenue and expenditure
Frs. billion
1979
1980
1981
1982
1983
1985
1986
General Government
Current revenue
Income from property and firms
less:
Interest on the public debt
1 066.7
1
158.9
1
242.2
1
293.7
1
300.9
1 432.5
1
486.9
1
624.2
1 721.2
1
735.2
2.3
-1.8
3.4
20.4
30.8
45.8
26.9
35.3
42.0
33.8
-116.2
-136.7
-164.6
-211.5
-289.1
-367.2
-395.4
-448.7
-509.2
-568.6
Indirect taxes
334.3
363.9
387.6
412.1
435.9
475.9
509.7
529.8
558.9
575.8
Direct taxes on households
406.0
471.9
516.3
541.9
567.7
655.4
668.6
732.0
772.4
790.6
Social security contributions by wage-earners
and sclf-cmploycd
Direct taxes on companies
361.3
377.5
405.3
437.7
464.7
505.2
557.5
635.0
701.3
741.4
76.4
81.7
91.9
89.7
87.5
112.9
114.2
132.9
148.0
157.1
2.4
2.3
3.4
3.4
338.9
1 454.6
1 615.2
Current transfers from the rest of the world
Current expenditure
Public consumption
Subsidies
Social security transfers to wage-earners and
sclf-cmploycd
Olher current transfers (net) to households
Current transfers to Ihc rest of Ihc world
Savings of general government
2.6
1
114.6
489.1
1
229.1
1
4.5
1
721.8
1
5.4
7.9
820.3
1 913.7
1
7.8
5.1
999.4
2 075.2
543.9
588.1
643.7
702.8
740.6
761.3
799.7
852.5
881.3
40.4
46.8
55.8
50.3
55.4
53.6
59.3
67.4
67.7
74.0
506.7
553.7
604.1
655.7
734.8
797.7
866.6
907.4
941.0
981.6
62.2
68.3
78.9
90.2
91.5
93.0
103.0
108.9
108.8
76.4
16.2
16.4
14.5
26.0
32.0
38.4
-47.9
-70.2
-96.7
-160.9
-314.3
-289.3
40.1
-333.4
36.2
29.3
29.5
-289.5
-278.2
-340.0
Central Government
Current revenue
651.6
720.9
774.4
800.2
Income from property and firms
less: Interest on the public debt
-28.9
-34.3
-30.0
-17.0
-12.5
2.6
-18.7
-14.6
-13.1
-24.5
-88.8
-106.8
-131.3
-171.6
-241.2
-312.8
-336.0
-385.4
-447.8
-509.2
Indirect taxes
324.2
353.8
377.5
401.1
424.3
463.2
495.4
513.4
540.6
556.4
Direct tuxes on households
372.4
431.6
472.6
501.5
524.6
596.5
609.8
659.4
696.5
711.6
70.1
74.2
83.3
82.8
78.4
103.4
103.4
119.7
133.7
143.2
2.4
2.3
3.4
3.4
4.5
5.4
7.9
7.8
5.1
233.8
1 239.4
1 272.0
642.3
Direct taxes on companies
Current transfers from the rest of the world
Current expenditure
Public consumption
2.6
777.0
718.1
798.6
863.4
926.5
1 065.5
373.6
411.)
440.5
476.8
519.1
857.4
1
143.7
545.9
859.3
1
189.5
900.4
1
917.7
882.6
560.2
584.9
626.5
Subsidies
39.6
45.9
54.7
49.0
54.1
52.2
57.2
65.4
65.4
71.4
Current transfers (net) to households
52.3
56.6
64.1
65.8
75.1
75.9
77.4
85.1
90.8
90.3
Transfers (net) to the rest of the world
16.2
16.4
14.5
26.0
32.0
38.4
40.1
Transfers (net) to local authorities
61.3
70.7
79.5
83.2
94.2
97.9
103.9
Transfers (net) to social security
Savings of central government
Sources;
175.1
197.9
210.1
-66.5
-77.7
-89.0
36.2
29.3
29.5
119.8
124.1
134.0
225.7
291.0
333.4
350.7
342.4
303.3
304.5
-126.3
-288.5
-286.3
-330.2
-333.4
-321.7
-389.4
Statistical Yearbook ofBelgium ~ Vol. 106. 1986 éd.. National Institute or Statistics: JMtcumenlation sur la situation conjoncturelle. 1987. Research and Documentary Service of
ihc Ministry of Finance.
Table E.
Belgium - Labour market
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
4 212
Labour market
Labour force1
Thousands2
3 999
4 030
4 056
4 081
4 140
4 156
4
173
4 197
4 213
4 214
4 202
Domestic Employment
Thousands2
3 782
3 758
3 751
3 753
3 799
3 797
3 722
3 672
3 634
3 635
3 662
3 698
of which: Employees
Wholly Unemployed
of which: Completely insured
Partially unemployed, daily
Thousands2
3 151
3 135
3 131
3
132
3 172
3 174
3 099
3 051
3 007
2 998
3018
3 043
Thousands2
175
233
266
290
304
322
416
490
545
546
506
478
Thousands2
162
215
247
265
276
295
379
443
491
494
456
431
average
Thousands
82.5
58.5
69.0
78.0
80.5
80.4
93.6
82.5
81.7
71.4
67.7
62.4
Vacancies
Thousands
4.1
4.1
3.4
4.2
5.7
5.9
4.4
4.0
6.2
8.0
18.4
17.8
100
100
100
100
100
100
100
100
100
100
100
3.6
3.5
3.3
3.2
3.2
3.0
3.0
3.0
3.0
3.0
2.9
96.4
96.5
96.7
96.8
96.8
97.0
97.0
97.0
97.0
97.0
97.1
Employment by activity
Percentages
Civilian Employment
Farm
Non-Farm
Wage and salary earners
82.8
82.9
82.9
82.9
83.0
83.0
82.7
82.5
82.2
81.9
81.8
Other
13.6
13.6
13.8
13.9
13.8
14.0
14.3
14.5
14.8
15.1
15.3
Industry
39.0
38.2
37.1
35.9
34.9
34.1
32.7
31.7
30.9
30.3
29.7
29.3
28.4
27.3
26.3
25.3
24.8
24.0
23.5
23.2
23.0
22.5
7.8
8.0
8.0
8.0
7.9
7.7
7.0
6.5
6.1
5.7
5.6
57.3
58.4
59.5
60.9
61.9
62.9
64.3
65.4
66.1
66.8
67.5
18.6
18.7
19.0
18.9
18.7
18.8
19.0
19.1
19.2
19.5
19.5
24.5
25.4
26.2
27.4
28.4
29.0
29.9
30.7
31.1
31.4
31.7
Manufacturing
Construction
Services
Wholesale, retail trade
_
-
-
-
-
_
-
-
_
-
Community, social, personal
services
1.
Including border workers (nel) and armed forces.
2.
Data at the 30th June.
Source:
Ministry of Employment and Labour.
"
Table F.
Belgium - Area breakdown of foreign trade
Millions US $
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
Exports, fob
37 488
44 813
56 214
64 499
55 476
52 406
51 842
51 704
53 667
68 647
OECD
31 809
37 781
48 397
54 969
46 482
44 297
43 784
43 636
45 612
59 737
EEC
26 904
32 299
41
177
46 314
38 809
36 979
36 279
35 628
37 061
48 975
Germany
8 414
10 243
12 661
13 718
11
148
10719
10 964
10 194
9 972
13 517
France
7 163
8 534
10 783
12 522
10 650
10 161
9 444
9 525
10 179
13 757
Netherlands
6 296
7 365
9 080
9 801
8 202
7 433
7 380
7 202
7 645
10 319
United Kingdom
2 567
3 233
4 535
5 471
4 778
5 062
5
5
126
5 251
5 975
Italy
1 642
2 051
2 985
3 562
2 819
2 643
2 421
2 656
2 921
4 006
World
107
USA
1 571
1 850
2 103
2 160
2 345
2 306
2 667
3
137
3 402
3 639
Other
3 334
3 632
5 118
6 495
5 328
5 012
4 838
4 872
5 149
7 123
5 376
6 682
7 471
9 044
8 414
7 573
7 541
839
928
1
1
1
OPEC
1 863
2 184
2 292
Other
2 675
3 570
304
Non-OECD
COMECON
Unspecified
7 632
7 605
8 355
104
963
1 085
1 049
2 323
2 075
1 913
1 715
1
4 343
4 324
4 363
4 756
4 805
5 709
580
536
516
436
450
555
142
926
2 986
2 928
4 064
4 710
350
346
486
114
347
1
597
Imports, cif
World
40 249
48 361
60 354
71 679
61 852
57 829
54 097
55 252
56 049
68 541
OECD
33 021
40 407
50 186
58 003
49 455
46 381
45 975
45 937
47 584
59 844
EEC
27 251
33 437
40 692
45 255
37 887
36 527
36 457
36 918
38 177
48 529
11
157
13 274
14 094
11 702
11 568
11
383
11 012
11 789
15 865
Germany
8 956
France
6411
7 944
9 494
10 356
8 488
8 039
7 745
8 082
8 457
10 863
Netherlands
6 750
7 797
10015
11 737
10 447
10 179
9 977
10 377
10 229
12 245
United Kingdom
3 134
4 067
4 807
5 787
4 607
4 070
4 697
4 843
5 014
5 725
Italy
1 599
1 945
2 451
2 572
2 086
2 080
2 023
1 978
2 002
2 908
USA
2 427
2 796
3 986
5 493
4 439
4 067
3 530
3 326
3 185
3 447
Other
3 344
4 175
5 509
7 254
7 129
5 788
5 988
5 693
6 223
7 868
7 206
7 921
10 127
13 626
12 368
11 408
8 083
9 031
8 237
8 547
728
842
1 076
1 656
1
461
1 861
1
546
2 252
1 689
1
552
OPEC
3 394
3 379
4 474
6 588
6 177
4 880
2 363
2312
1 841
1
830
Other
3 083
3 700
4 577
5 382
4 730
4 666
4 175
4 467
4 707
5
165
22
32
40
50
29
40
39
284
228
Non-OECD
COMECON
Unspecified
Source:
OECD, Foreign Trade Statistics. Series A.
151
Table G.
Belgium - Commodity breakdown of foreign trade
Millions US $
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
3 221
3 777
4 593
5 347
5 274
5 025
4 576
4 757
4 624
6 116
232
292
356
404
388
408
402
375
415
544
352
1 339
1 497
1 490
1 716
3 388
Exports, fob
SITC sections
0
Food and live animals
1
Beverages and tobacco
2
Crude materials, inedible, except fuels
1
127
1 325
1 586
1 669
1
2 045
1 952
3 580
5 369
5 021
4 507
4 370
4 068
3 535
156
196
231
233
254
254
264
387
423
343
4 585
5 701
6 644
7 422
6 477
6 173
6 216
6 449
6 882
8 597
506
1
3
Mineral fuels, lubricants and related materials
4
Animal and vegetable oils and fats
5
Chemicals
6
Manufactured goods classified chiefly by
12 855
15 824
19 246
22 054
17 603
15 746
15 950
15 972
16 560
20 533
7
Machinery and transport equipment
9 135
10 899
12 930
13 919
12 093
11 866
II 668
10 757
12 429
17 784
8
Miscellaneous manufactured articles
2 786
3 224
3 754
4 465
3 887
3 661
3 756
3 709
3 883
5 377
4 293
6 272
material
Imports, cif
SITC sections
0
Food and live animals
5 015
5 919
6 434
5 851
5 736
5 094
5 184
4 973
1
2
Beverages and tobacco
Crude materials, inedible, except fuels
513
624
768
837
678
655
648
621
641
840
2 787
3 212
4 296
5 172
4 476
3 864
4010
4 056
4 169
4 282
5 652
6 007
8 580
12 393
12 560
956
9 501
10 232
9 323
7 284
230
256
351
323
293
283
272
365
353
290
3 339
4 267
5 376
5 972
5 235
5 144
5 184
5 437
5 735
7 119
11 386
11 442
14 876
11
773
12 976
19 129
4 229
4 515
6 481
3
Mineral fuels, lubricants and related materials
4
Animal and vegetable oils and fats
5
Chemicals
6
Manufactured goods classified chiefly by
172
13 585
15 786
12 145
11
7
Machinery and transport equipment
10 160
12 570
14 740
16 044
13 245
12 501
12 150
8
Miscellaneous manufactured articles
3 759
4 518
5 423
6 136
5 066
4 723
4 390
material
Source:
OECD, Foreign Trade Statistics. Series B.
9 050
11
11
326
11
115
Table H.
Belgium - BLEU Balance of payments
US dollars millions'
1978
1979
1982
1983
1984
1985
1986
39 516
51
137
50 585
48 013
47 612
48 006
48 719
62 088
42 016
55 419
62 138
54 646
50 904
48 836
48 843
48 910
60 971
Trade balance
-2 470
-4
128
-5 001
-4 061
-2 891
-1
224
-838
-190
2 047
1 378
1 954
1 674
-29
-2 081
-3 624
-2 887
730
Private transfers, net
279
-345
-376
-412
-241
Official transfers, net
530
-624
-937
-889
-991
2 441
Balance on goods and services
Current balance
-838
57
1981
Exports, fob2
Imports, fob2
Services, net
291
1980
I
174
1 711
-I
117
588
2 777
836
1 398
3 894
-180
-173
-125
-125
-982
-708
-579
-844
-432
-45
695
2 925
179
1
1
-3 050
1936
187
-2 411
-150
3 394
3 880
2 455
-262
-50
-54
-3 173
081
919
322
-624
-1
390
-735
-2 607
931
2 475
133
362
1
340
681
-566
44
-694
-95
641
-248
Long-term capital (excluding special
-397
transactions)
u)
private
-127
h)
official
-270
-1
1
365
2515
Basic balance
1
235
-3 200
-1
542
-307
Non-monetary short-term private capital
1
044
-1
-1 976
283
-2 956
-810
-252
-237
-520
-853
571
1 220
1 037
68
253
-747
1 002
-379
352
-746
-260
-409
-165
-125
318
1555
-2 595
-2 789
-244
-751
219
Non-monetary short-term official capital
533
307
Errors and omissions
390
356
Balance on non-monctarv transactions
-I
2
II
-I
287
1.
Exchange rales: 1976: IS = 38.61FB; 1977: 1$= 35.84FB; 1978: IS = 3I.5FB; 1979: IS = 29.3IFB; 1980: 1$= 29.25FB; 1981 : 1$ = 37.I4FB; 1982: 1$ = 45.70FB;
2.
Including commission processing and non-monetary gold.
1983: 1$ = 51.13FB; 1984: IS = 57.76KB; 1985: IS = 59.43FB: 1986: 1S = 44.69FB.
Source:
OECD.
Luxembourg - Selected background statistics
Average
1977
1978
1979
1980
1981
1982
1983
1984
1985
19862
1977-86
A.
B.
Per cent changes from previous year
Private consumption1
Gross fixed capital formation1
2.1
2.9
3.3
2.8
1.6
0.2
0.8
0.8
2.5
2.9
-1.1
1.3
4.1
11.4
-6.0
-0.3
-8.3
-1.3
2.1
4.1
GDP1
2.4
1.8
3.8
3.0
1.4
-1.0
1.5
3.2
5.4
2.9
2.5
GDP price deflator
Industrial production
Employment
Compensation of employees (current prices)
Productivity (GDP/employment)
5.9
0.9
5.2
5.7
7.7
8.1
10.6
7.7
6.3
3.4
3.0
2.7
0.5
3.4
3.2
-3.5
-5.4
2.2
5.5
11.8
6.8
2.5
0.5
-0.1
-0.6
0.5
0.7
0.3
-0.2
-0.3
0.6
1.4
2.2
8.0
10.3
5.6
8.1
10.5
9.8
6.9
6.6
8.0
6.0
2.0
1.8
4.4
2.4
0.7
-1.3
1.8
3.5
4.9
1.4
Unit labour costs (compensation/GDP)
5.4
8.4
1.7
5.0
9.0
10.9
5.3
3.3
2.4
3.1
24.0
24.9
24.3
24.6
27.0
25.6
25.2
22.4
20.9
20.8
0.3
-2.0
1.0
-1.6
-1.4
-0.3
-0.1
1.6
2.9
1.4
1.3
1.8
2.0
0.4
2.6
-1.0
-2.7
-1.6
1.1
4.6
6.6
6.4
62.3
66.0
63.7
1 690
800
1 200
Percentage ratios
Gross fixed capital formation as % of GDP
at constant prices
Stockbuilding as % of GDP at constant prices
Foreign balance as % of GDP at constant prices
Compensation of employees as % of GDP
at current prices
Number of unemployed
Unemployment as percent of civilian labour force
C.
1.9
0.6
63.3
1
100
-
-
-
-
-
-
-
-
1
64.1
65.8
62.6
60.0
57.8
57.7
100
1 600
2000
2 500
2 700
2600
0.6
1.2
1.2
1.9
1.9
1.8
-
0.3
-
-
-
2 400
-
Other indicator
Current balance (million dollars)
1.
At constant 1980 prices.
2.
Estimates.
Source:
OECD.
626
-
-
-
601
754
1 074
Table I.
Luxembourg - Gross national product
Frs. billion
1975
1976
1978
1979
1980
1981
1982
1983
1984
1985
Current prices
50.0
56.5
61.1
65.0
70.6
78.1
86.2
95.7
104.4
112.0
118.6
13.0
14.7
16.3
17.5
19.5
22.2
24.7
26.3
28.6
30.8
33.9
24.9
25.7
27.0
29.8
35.9
36.2
39.7
38.9
40.5
42.7
-1.6
-4.2
1.2
-2.9
-1.9
-9.9
-6.6
5.7
1.1
5.7
98.9
110.8
117.0
134.3
146.1
161.7
177.5
194.7
200.2
Private consumption
Public consumption
Gross fixed capital formation
Change in stocks
24.1
^t.O
Total domestic demand
83.2
94.4
Exports of goods and services
80.1
87.7
88.5
93.7
110.7
116.9
122.3
141.0
156.6
195.5
220.4
Imports of goods and services
76.8
82.5
85.2
92.7
106.1
118.3
126.2
143.0
156.5
191.0
208.8
Gross national product at market prices (SNA)
86.5
99.6
102.3
111.8
122.0
132.9
142.3
159.8
177.6
199.1
211.8
Net factor income from abroad
11.5
16.5
19.6
21.8
24.3
29.6
39.3
61.5
72.2
77.3
82.4
Gross national product at market prices
98.0
116.1
121.9
133.6
146.3
162.5
181.6
221.3
249.8
276.4
294.2
1980 prices
Private consumption
Public consumption
67.9
70.0
71.5
73.5
76.0
78.1
79.4
79.5
80.1
80.8
82.8
19.5
20.0
20.5
20.9
21.5
22.2
22.5
22.6
23.1
23.2
23.8
Gross fixed capital formation
Change in stocks
32.1
30.9
30.6
31.0
32.2
35.9
33.7
33.6
30.9
30.4
31.1
-2.0
-0.8
-2.5
1.3
-2.1
-1.9
-0.5
-0.1
2.2
4.2
2.0
117.6
120.0
120.0
126.7
127.6
134.3
135.2
135.7
136.4
138.7
139.7
Exports of goods and services
99.3
100.4
104.0
108.0
118.3
116.9
112.2
113.4
119.1
139.7
150.6
Imports of goods and services
99.2
100.1
101.6
107.5
115.0
118.3
115.7
115.5
117.5
133.0
140.7
117.7
120.4
122.5
127.2
131.0
132.9
131.6
133.6
137.9
145.4
149.6
Total domestic demand
Gross domestic product at market prices (SNA)
Note :
Source:
Data may not add because of rounding.
OECD.
Table J.
Luxembourg - Labour force, employment and unemployment
Thousands
1977
La bour
A.
B.
force (A + B)'
Unemployed
Total employed
1979
158.0
1980
1981
1982
1983
1984
1985
163.6
158.0
157.5
159.2
160.3
160.3
160.3
161.4
0.8
1.2
1.1
1.1
1.6
2.0
2.5
2.7
2.6
157.2
156.3
156.9
158.2
158.7
158.3
157.8
158.7
161.0
Agriculture
10.0
9.7
9.1
8.5
7.9
7.6
7.4
7.1
6.8
Industry
48.9
46.0
44.6
43.6
42.9
42.0
40.6
40.1
39.9
13.1
Iron and Steel
22.4
19.7
18.7
17.7
17.2
16.7
15.1
13.8
Construction
15.2
15.0
15.6
16.4
15.9
15.3
14.6
14.0
13.6
Services
64.8
66.9
68.6
70.0
72.0
73.1
72.1
74.1
76.8
General Government
18.3
18.7
19.2
19.7
20.0
20.3
23.0
23.4
23.8
133.7
133.3
134.9
137.0
138.7
138.7
138.4
139.5
142.1
23.5
23.0
22.0
21.2
20.0
19.6
19.4
19.2
18.9
0.5
0.8
0.7
0.7
1.0
1.2
1.6
1.7
1.6
a)
b)
Employees
Self employed and family helpers
Unemployment rate2
1.
2.
1978
Domestic definition (including border workers, net).
Unemployed as a percentage of labour force.
Source:
STATEC.
BASIC STATISTICS :
INTERNATIONAL COMPARISONS
BASIC STATISTICS: INTERNATIONAL COMPARISONS
Reference
Units
P°rn!ltaT
Thousands
Inhabitants per sq.km
Net average annual increase over previous 10 years
1985
Number
....
15 752
2
*
TotaUivilian employment (TCE)2
""«^""t5
ofwhich: Agriculture
% of TCE
Industry
Serviced
Australia
1985
6 67S
£*
* of JCE
%ofTCE
27./
66.1
Gross domestic prodact (GDP)
At current prices and current exchange rates
Billion UivS
i^05
At current prices using current PPPV
Per capita
Average annual volume growth over previous 5 years ...
Billion US S
USÏ
%
1984
Per capita
*^**
Gross fixed capital for-atto. (GFCF)
ï°fPRp
ofwhich: Machinery and equipment
5°fr?nD
Residential construction
Average annual volume growth over previous 5 years
1985
"85
% of GDP
...
Grot, ».h, ratio'
Geaeral gomtuneat
Current expenditure on goods and services
%
'^
3.0
?o4f84.
54 «4.
3-*>V»J
"84
*<"i
1985
r^r.n
ios«.
ï°ïfiDP
Current disbursements'
985
20.1
1*7
33 4(84)
*°Ï5R
]lll
1985
34.1 (84)
%ofGNP
1984
0.46
UiS
»'
° ""
Passenger cars, per 1 000 inhabitants
Telephones, per 1 000 inhabitants
£,"7"
Number
o«
985
Television sets, per 1 000 inhabitants
Number
985
Doctors, per 1 000 inhabitants
Infant mortality per 1 000 live births
Number
Number
985
1985
. .
9.2 (.84)
Current receipts
%of GDP
Neton*talderelc4^»siSta«e
Indicators of litiag staadards
Private consumption per capita using current PPP s'
u.nA.
_.- .
...
Wages and prices (average annual increase over previous 5 years)
Wages (earnings or rates according to availability) ....
540(831
540(83)
*>
J*»»
Consumer prices
%
,986
'
*
F^p£?of goods, fob'
Million US J
1986
22 536
as % of GDP
*
average annual increase over previous 5 years
*
Imports of goods, cif
as % of GDP
average annual increase over previous 5 years
Total omci.lr.aW
As ratio of average monthly imports of goods
Million US S
*
'J,
1986
23 916
'£7
*
Million SDR's
Austria
Canada
Belgium
Denmark
Finland
period1
1986
6 202
Ratio
7 555
9 857
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norw
Portugal
25 379
113
3 562
57 128
120 754
366
14 484
3 279
4 148
10 230
90
323
3
119
14
101
75
2
51
190
324
141
427
12
13
111
0.0
0.1
1.1
0.1
0.4
0.5
-0.1
1.0
1.1
1.2
0.3
0.8
0.1
0.6
0.6
0.3
3 235
35 607
9.0
4 901
55 162
61 015
9 950
245
243
Spain
Sweden
Switzerland
Turkey
United
United
Kingdom
States
38 602
8 350
6 530
49 870
56 618
239 283
76
19
158
64
231
26
89
0.6
0.8
0.2
0.2
2.1
0.1
1.0
0.8
3 171
107 150
1
11 311
2 522
2 427
20 916
25 011
3 588
20 509
58 070
160
5 083
1 329
2 012
4 029
10 623
4 299
15 213
24 089
2.9
5.2
6.7
11.5
7.6
5.5
28.9
10.6
16.0
11.2
8.8
4.2
4.9
11.1
7.2
23.2
17.6
4.8
6.6
57.3
2.6
3.1
38.1
29.7
25.5
28.1
31.9
32.0
41.0
27.3
36.8
28.9
33.6
34.9
33.4
28.1
32.4
27.8
35.3
31.8
29.9
37.7
17.6
32.4
28.0
52.9
67.4
69.3
65.2
56.6
60.4
53.5
43.8
52.6
55.1
55.2
56.3
62.4
67.0
56.5
65.0
41.5
50.6
65.3
55.7
25.1
65.0
68.9
114(84)
1 056 (84)
Yugoslavia
23 120
66.1
79.1
346.0
57.9
54.0
510.3
625.0
32.8
2.7
18.2
358.7
1 327.9
3.6
125.0
21.9
57.9
20.7
164.2
100.2
92.7
52.7
449.7
3 946.6
43.5 (84)
8 743
8 022
13 635
11 319
11 024
9 251
10 243
3 294
10 958
5 123
6 278
10 977
9 745
8 628
6 722
13 960
2 032
i 4 255
12 006
14 195
1 057
7 943
16 494
1 896(84)
! 317.8
85.7
119.7
382.2
68.0
59.6
694.7
811.6
62.3
27.6
575.1
1 468.4
5.3
168.9
63.6
50.9
11 345
12 150
15 198
13 311
12 217
12 643
13 265
6 296
7 795
10 093
12 235
14 385
11 710
15 367
5 021
1.6
0.6
2.6
2.3
2.6
1.1
1.3
1.0
0.7
1.8
0.9
3.9
2.4
0.7
3.3
3.1
22.3
15.9
19.6
18.5
23.4
19.0
21.5
20.9
18.2
27.5
20.2
18.6
25.4
21.7
i
8 279
1.0
1
1.4
1.8
1.3
21.8
i
19.1
19.1
23.8
18.9
19.5
9.6
5.3(84)
6.6
8.6
8.8
9.4
8.4
7.9
5.8 (84)
4.6
3.2
5.4
4.3
6.2
4.7
5.5
4.0
4.8
-0.5
-4.0
0.9
2.1
2.6
-0.1
-1.3
-2.8
-1.0
-1.9
0.3
2.7
-2.8
-1.0
6.6
-1.2
-4.5
24.4
15.9
19.0
14.9
23.7
22.2
12.2
16.3
18.1
17.7
31.4
65.3
24.1
20.9
30.0
23.1
15.6
16.3
16.4
18.6
47.8 (82)
53.0(82)
55.9(84)
44.0
54.3 (84)
56.1
18.0
11.0(84)
7.9
5.6(83)
4.7
10.1 (84)
5.0(84)
18.7
17.3
20.1
25.3
20.2
16.3
19.9
19.9
18.0
19.1
19.5
44.9(84)
47.0(84)
52.3
43.3 (84)
56.7
37.6
49.4
43.4
43.2
26.4(84)
51.5(83)
51.9
27.1 (84)
46.5
39.9 (84)
57.0
40.6
48.5
45.4
34.6
34.8 (84)
43.6(83)
44.1
30.3 (84)
0.28
0.56
0.50
0.85
0.36
0.77
0.45
0.33
0.35
6 490
7 637
8 484
8009
7 274
6 254
6 751
306(81)
460(83)
300(81)
1.7(82)
335(84)
414(83)
303 (84)
2.8 (84)
6 826
6 287
421 (82)
293
316
360(83)
424
108(83)
431
206(83)
355 (84)
664(83)
783
615
541 (83)
621
336(83)
525(83)
235(83)
471 (80)
392
380
297 (80)
2.1 (82)
372
158(80)
2.8 (83)
303
181(80)
1.8(82)
2.5(84)
2.1
11.0
9.4
9.1 (83)
7.9
6.3
5.0
4.4
5.5
6.2
3.8
5.7
5.8
6.3
6.9
22 428
68 652'
4 338
2.4(84)
1.3(82)
5.7
8.9
6.9
9.1
14.1
8.7
3.7
25.1 (85)
7.4
2.6
20.4
42.4
9.0
12.0(85)
1.02
12.3(84)
6.3
4.3 (84)
4.1
0.25
9.1
8.0
5.2(82)
4.1
15.8»
-1.4
1.2
2.7
21.0
17.8
14.2
14.0
37.5(81)
33.2(81)
32.3 (82)
31.2(82)
7.1(81)
1
1.02
3.7(84)
2.1
5.0
30.0
18.7
19.2
16.5
27.4
13.2
8.5
21.1
18.3
59.6
30.9
44.8 (84)
35.3
59.8
34.4
42.8(84)
31.1
0.80
0.30
0.33
0.24
6 535
10 214
5 821*
8 755*
455
367
135(82)
240
377
402
448 (84)
404(84)
410(86)
646
622(84)
369
890(83)
244(84)
3.6(82)
250(80)
1.3(82)
336(83)
1.7(84)
317(86)
291
330
166(83)
140(80)
256(82)
390
2.2 (84)
9.6(86)
2.4
2.2
1.8(82)
3.3
2.5
1.4(84)
10.8
8.4
7.0(84)
6.8
6.9
3.3
10.3(85)
9.2(85)
19.2(85)
15.0(85)
8.0
2.9
11.6
7.8
21.5
11.1
7.4
3.1
5.9(84)
12.6
3.9
11.3
1.8
5.3
«
17.8
18.6
4.9
341
9.0
17.2
2.6(82)
7 270
5 456
19.8
8.4
414
3 076
2.4
4.8
8 540
6 624
1.9
8.1 (84)
221 (83)
535 (83)
10.9
4 041*
6.1 (83)
13.7(81)
15 356
4.9
1 299
329
9.1 (82)
759*
18(82)
55(83)
76(79)
1.5(83)
312(83)
14.0(84)
966*
521 (84)
473 (84)
650(84)
122(83)
336(84)
621 (80)
175(83)
0.5(83)
2.3 (83)
1.6(82)
10.6(84)
31.7(83)
9.4
37.2
9(4)
121(83)
9.1
4.0
5.5
3.8
56.3
7 188
216
16 296
1 19 268
242 400
5 640
1 092
12 636
97 476
210 804
80 580
5 837
18 240
7 188
27 132
37 200
37 248
107 016
217 308
86.8
25.0
36.6
30.2
23.4
38.8
17.2
40.4
69.4
27.2
15.9
64.5
26.7
31.5
34.7
16.5
37.1
40.2
15.0
23.8
5.5
16.5
7.3
4.4
4.2
5.8
3.1
3.3
6.7
5.6
3.9
10.0
5.2
6.8
3.3
0.7
0.3
11.7
5.8
5.4
6.7
23.5
0.7
-1.4
-3.1
68 5447
21
2.5 (84)
6 335*
4.7 (82)
8.1 (84)
5.0(84)
3 634.6
33.9
26 724
86 664
10.2(85)
4 118
9.8
8.9(82)
625.2
11 068
7 908(85)
312
22 824
15 300
128 760
189 684
116
U 616
99 972
127 668
75 420
6 156
20 292
9444
34 920
32 484
40 860
126 156
369 960
40.4
86.7
23.5
39.4
28.3
25.2
30.3
34.6
41.3
63.8
27.9
9.6
60.3
28.1
35.0
45.6
21.3
32.4
44.1
21.5
28.1
9.4
18.8
4.9
2.1
4.1
5.4
1.5
1.3
3.1
4.9
1.6
1.8
1.9
-2.2
2.7
1.3
5.4
-0.6
1.7
2.4
6.0
12.6
4.2
7.2
-7.5
3 348
4 116
528
28 579
45 626
357
255
2 658
18 661
35 394
10 687
4 752
10 541
1 8%
12 581
5 568
20 726
1 332
15 726
39 790
1 259
0.6
2.5
1.4
3.1
3.4
1.7
3.2
3.2
2.6
3.9
2.0
0.9
7.3
2.8
5.1
2.4
7.1
1.7
1.8
1.5
2.2
5 778
3.0
81
5 7247
1.2
1
11
1
340
1
11 328(85)
8 196
Sources:
At current prices and exchange riles.
1.
Unless otherwise slated.
2.
According to Ihc definitions used in OECD Labour force Statistics.
3.
PPP's - Purchasing Power Parities.
4
Gross saving - Gross national disposable income minus Private and Government consumption.
5'
Current disbursements - Current expenditure on goods and services plus current transfers and payments of property income.
6.
Gold included in reserves is valued at 35 SDR's per ounce. End of year.
7.
8.
Including Luxembourg.
Included in Belgium.
9.
Including non-residential construction.
Papulation and Employment: OECD Labour Force Statistics.
GDP, GFCF, and General Government: OECD National Accounts. Vol. I and OECD Economic Outlook,
Historical Statistics.
Indicators of living standards: Miscellaneous national publications.
Wages and Prices: OECD Main Economic Indicators.
Foreign trade: OECD Monthly Foreign trade Statistics, series A.
Total official reserves: IMF International Financial Statistics.
19.5.87
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No. 44217
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ISBN 92-64-13052-7
ISSN 0376-6438
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