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I.
2.
b.
8.
v
t
ORBANISATION
FOR
ECONOMIC
CO-OPERATION
AND
DEVELOPMENT
4
\
ORGANISATION
**
. V
%
DE
COOPERATION
ET
DE
D t V E L 0 P P E M E N T
ECONOMIQUES
BASIC STATISTICS OF THE NETHERLANDS
THE COUNTRY
Area (thousand sq.km. in 1968)
Cultivated agricultural land (thousand
sq.km. in 1967)
Grassland and pastures (thousand sq.km.
in 1967)
Major cities, 1st Jan. 1968 (thousand in¬
habitants)
8.7
13.6
Amsterdam
858
Rotterdam
711
The Hague
576
3.0
Forest (thousand sq.km. in 1968)
THE PEOPLE
Population, end-Dec. 1968 (thousands)
Number of persons per sq.km.
Net annual rate ol" natural population
increase per thousand inhabitants,
12 787
380
10.8
1966-1968
Employment in 1968 (thousand man
years)
Agriculture, fishing
Industry, construction
4 555
359
1 854
Others
2 342
THE PUBLIC SECTOR
Contribution
to
net
national income at
Government employees (incl. military) in
per cent of total employment in 1968
Consolidated government debt in per cent
factor cost in 1968 (per cent)
Expenditure on goods and services in per
cent of gross domestic product in 1968
Tax revenue in per cent of net national
21.3
of net national income in 1968
52.0
income in 1968
PRODUCTION
Gross national product in 1968
(US dollar billion)
Growth of real GNP, 1966-1968 (annual
rate, per cent)
Gross fixed investment in per cent of
24.8
4.4
25.9
gross national product in 1968
Growth of real fixed investment, 1966-1968
average (annual rate, per cent)
Growth of total labour productivity in the
enterprise sector,
1966-1968 (annual
rate, per cent)
of which :
industry
4.7
7.7
LIVING STANDARDS
Gross
national
product
per capita
in
1968 (US dollars)
Number of hospital beds per thousand in1 942
Growth of real GNP per capita, 19661968 (annual rate, per cent)
Gross average hourly earnings of male
A-orkers in industry, October 1968
(US dollars)
3.2
inhabitants, August 1968
Number of telephones per thousand in¬
habitants, end-1966
1.22
Number of radio
sets
per thousand
in
habitants cnd-3967
Number of persons per 100 dwellings,
1968
habitants
Number of passenger cars per thousand
357
220
Number of TV sets per thousand inhabi
tants, end-1967
FOREIGN TRADE AND PAYMENTS
(1968, million US dollars)
7 784
Commodity exports, f.o.b.
Commodity imports, f.o.b.
Services, net
430
Transfers, net
Exports
to/from OECD countries
Other
Current balance
61
Lon£-term capital
Basic balancj
Exporls of goods and services in per cent
of GNP
46.1
Imports of goods and services in per cent
of GNP
Percentage distribution :
8 110
45.7
developed
incl. East. Europe
Developing countries
Food, drinks, tobacco (S1TC
groups 0 and 1)
Materials (2, 3, 4)
Semi-finished good and chem
icals (5, 6)
Finished manufactured goods
<7, 8, 9)
Currency unit: 1 Guilder = 3.62
83.6
Imports
80.3
countries.
4.1
3.4
12.3
16.3
24.0
13.4
16.5
20.«
32.1
30.0
27.4
35.6
OECD ECONOMIC SURVEYS
Archives - j
Références
- DOC
PRÊTÉ -
RETOUR BUREAU 706
NETHERLANDS
ORGANISATION
FOR
ECONOMIC
CO-OPERATION
AND
DEVELOPMENT
The
Organisation
for
Economic
Co-operation
and
Development was set up under a Convention signed in Paris on
14th December I960 by the Member countries of the Organisa¬
tion for European Economic Co-operation and by Canada
and the United States.
This Convention provides that the
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 ;
to contribute to the expansion of world trade on a
multilateral, non-discriminatory basis in accordance
with international obligations.
The legal personality possessed by the Organisation for
European Economic Co-operation continues in the OECD,
which came into being on 30th September 1961.
The members of OECD are : Austria, Belgium, Canada,
Denmark, Finland, France, the Federal Republic of Germany,
Greece, Iceland,
Ireland,
Italy,
Japan,
Luxembourg,
the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland,
Turkey, the United Kingdom and the United States.
The Socialist Federal Republic of Yugoslavia is associated
in certain work of the OECD, particularly that of the Economic
and Development Review Committee.
The annual review of the Netherlands by the OECD
Economic and Development Review Committee took place
on 13th March 1969.
The present Survey has been
updated subsequently.
CONTENTS
Introduction
I
The 1967-68 Recovery
5
Demand
II
III
IV
Y
6
Supply
10
Internal and External Equilibrium of the Economy
13
The Labour Market
14
Incomes, Costs and Prices
14
Balance of Payments
18
Export Performance
22
Economic Policy
25
Public Finance
27
Central Government
27
Monetary Policy and Banking
32
Incomes Policies
35
Prospects
38
Some Longer-term Aspects
42
Conclusions
44
TABLES
Text:
1
Gross National Product and Expenditure
7
2
Gross Fixed Asset Formation
9
3
Current Building Indicators
4
Production and Employment of Enterprises
10
12
5
Prices and Wages
16
6
Components of Wage Changes per Worker
7
Balance of Payments
17
19
8
Imports by Main Commodities
20
9
Dutch Shares in OECD Exports
23
10a Comparative Export Performance in Commodity Markets
24
106 Comparative Export Performance in Regional Markets
26
1 1
General Government Account
28
12
Central Government Budget Changes
29
13
Change of Central Government Expenditure and Receipts by Eco¬
nomic Categories
30
14
Commercial Banks' Lending
33
15
Market Issues of Shares and Bonds
34
16
Causes of Changes in Domestic Liquid Assets
35
17
Economic Plans 1966-1969
39
18
Central Economic Plans and Medium-Term Forecasts
43
Statistical Annex:
A
National Product and Expenditure
49
B
National Product and Expenditure
50
C
Origin of Gross Domestic Product at Factor Cost
51
D
Income and Expenditure of Households and Private Non-Profit In¬
stitutions
52
E
Supply and Demand Indicators
53
F
The Labour Market and Employment
54
G
Prices and Wages
55
H
Money and Banking
56
I
Central Government Budgets
57
J
Merchandise Trade
58
DIAGRAMS
1
Industrial Production by Sectors
11
2
Internal and External Equilibrium
13
3
The Labour Market
15
4
Foreign Trade
21
5
Interest Rates
36
INTRODUCTION
Under the impact of vigorous world demand and of expansionary
domestic policies, the growth of economic activity has accelerated sharply
since the autumn of 1967 with a marked improvement of the overall balance
of the economy in 1968.
Unemployment started to recede and the rise
of unit labour costs came to a virtual standstill. Prices increased relatively
moderately and the current balance of payments in rather big deficit in
1966 and 1967
swung into a small surplus.
This year's growth prospects are nearly as good as for 1968, but recent
months have seen a re-emergence of strong inflationary pressure. The
steepening trend of wages and higher indirect taxes in connection with the
switch to the value-added tax system have led to important upward revi¬
sions of prices which also involved a significant widening of profit margins.
The balance-of-payments may worsen somewhat in response to a loss of
price competitivity and may also be adversely affected by less buoyant
world demand and less elastic supply conditions at home. To keep the
gathering boom within bounds and to check the rise of prices, the Govern¬
ment has taken or announced a series of restrictive measures in the monetary,
the fiscal and the price fields.
With buoyant demand, the rapid erosion of
wage increase through price inflation and the risk of a price-wage spiral, the
measures have recently included a temporary general price-freeze.
The present survey analyses, in Part I, the recent business upswing and
notes, in Part II, the concomitant progress towards better internal and
external equilibrium.
The contribution of policy to the adjustment process
is analysed in Part III.
Prospects and policy issues are discussed in Part IV
against the background of the medium-term target projections established
by the Government in the summer of 1968.
A final section contains the
conclusions.
I
THE 1967-68 RECOVERY
The last business cycle reached its lower turning point around the
middle of 1967 and has since shown an unexpectedly strong upswing, with
OECD Economic Surveys
the labour market situation and the internal and external balance of the
economy clearly improving until the end of last year. The growth of business
production accelerated to 6.5 per cent almost matching the growth of the
total wage and salary bill.
Both external and internal factors contributed
to the better growth and cost-price performances and to the strengthening
of the foreign balance.
Demand
The increase in total nominal expenditure including stock formation
accelerated from 8.4 per cent in 1967 to about 9.5 per cent in 1968 and,
with prices rising less than previously, from 5.7 per cent to more than
7 per cent in real terms.
The expansion was led by government investment
and merchandise exports which prompted a vigorous revival of private
productive investment.
By contrast, private consumption and particularly
residential construction and government consumption were less buoyant
than in 1967.
The rate of growth of total expenditure in 1968 (9 per cent) exceeded
the official forecast as laid down in the Central Economic Plan (published
in January 1968) by more than half.
The greater part of the difference is
explained by changes in basic assumptions ("exogenous variables") under¬
lying the Economic Plan.
Externally, the expansion of Dutch export mar¬
kets was much stronger than had been thought likely (see Table 18).
In¬
ternally, government spending exceeded the original estimates by substantial
margins and the expected fall in residential construction did not materialize.
Furthermore, the slowing down of wage increases was less pronounced
than foreseen.
Largely as a result of the greater buoyancy exhibited by
these demand factors, other expenditure components of a more endogenous
nature also turned out to be much stronger than foreseen.
Exports on a national accounts basis showed a volume growth of more
than 1 1 per cent in 1968 after an increase of 6.6 per cent in 1 967.
Both goods
and non-factor services contributed to the acceleration (the rise of factor
income from abroad slowed down conspicuously).
The rate of growth of
merchandise exports outstripped the average (weighted) expansion of Dutch
export markets, but much less than in 1967, suggesting that excess capacities,
which had previously acted as a strong export stimulus, have been largely
absorbed.
On the other hand, exports have been boosted by the expansion
of natural gas supply.
The expansion of government investment was maintained at the high
rate of 1967 (13 per cent in real terms).
The initial 1968 budget estimates
had already foreseen a sharp increase of investment spending, and this was
reinforced in the course of the year by additional measures to combat
Table 1
Gross National Product and Expenditure
Fl. Million
Percentage change at constant 1963 prices from previous year1
at current
prices
1964
1965
1966
1967
1963
I
Private consumption
2
Government consumption
3
Gross fixed investment
1968
1969
Prelim.
Forecasts
estimates
(unrevised)
31 520
6.0
7.0
2.9
5.1
4.5
4
8 190
1.7
1.6
2.2
3.9
2.3
2
12 380
18.0
4.9
6.2
7.2
8.6
5'/4
5
4
Enterprises
9900
19.5
5.5
7.5
6.0
7.4
5
Government
2 480
12.1
2.2
0.4
13.0
12.5
7
52 090
8.2
5.7
3.7
5.5
5.2
4
7
Total domestic expenditure (excluding stocks)
Stock building (change in)
480
2.4
0.3
0.2
8
Exports of goods and non-factor services
24 580
11.9
7.5
5.9
5.7
11.8
9
Imports of goods and non-factor services
24 920
15.2
6.0
7.1
6.3
10.6
8'/2
V*
6
9
Vi
10
Foreign balance (change in)
11
GDP
52 230
8.9
5.3
2.2
5.3
5.8
VA
12
GNP
52 860
8.9
5.0
1.9
5.6
5.4
4'/2
1
0.6
0.4
Lines 6, 7 and 10 in per cent or previous year's GDP adding up to rate of growth of GDP.
Source :
National rekeningen 1967, Central Bureau of Statistics; Centraal economisch plan 1969, Central Planning Bureau.
OECD Economic Surveys
regional unemployment1.
Government policies also provided a direct
stimulus to private investment, and particularly to residential construction
which had originally been forecast to shrink by more than 5 per cent in
19682.
The decline of activity on the freely-financed dwelling markets3 was
more than offset by rising demand for government-supported housing,
encouraged by new subsidy arrangements for dwellings eligible for building
premia.
Productive investment in the enterprise sector had been officially fore¬
cast to remain level in 1968 but probably increased by more than 8 per cent
in volume.
According to the Planning Bureau's model of the Dutch eco¬
nomy, about 5 percentage points of the increase can be regarded as induced
by exogenous factors (steeper trend of world demand and "autonomous"
domestic expenditure) or resulted from unforeseen investments of public
enterprises.
Furthermore, business construction was favoured by good
weather and the abolition of building licensing as from 1966.
But apart
from the largely unexpected favourable factors on the demand and supply
side, it appears that there has also been a rise of the propensity to invest
in response to the greatly improved profit and liquidity situation, buoyant
sales expectations and tax incentives.
It is to be noticed, however, that the
favourable investment outcome was concentrated outside industry and was
influenced by a bunching of purchases of aircraft, lorries and trucks.
The rate of growth of both public and private consumption showed a
decline in
1968,
but if incidental factors* are allowed
little change in the trend.
for, there was
In spite of a significant moderation of wage in¬
creases, total private disposable income advanced at a faster pace than a
year earlier, owing to a reversal of the previous fall of employment, a
reduction of the average direct tax burden and a steeper trend of non-wage
income.
The rise of the total wage bill slowed down from 8.3 per cent in
1967 to 7.6 per cent in 1968, while the growth of other incomes accelerated
from 9.0 to 11.5 per cent.
The resulting contraction of the share of wages
in total income was associated with an increase of the national savings
1
Actual spending on supplementary employment schemes was stepped up from
about Fl. 150 million in 1967 to FI. 350 million in 1968.
2 The actual drop of housing starts and completions was outweighed among
other things by the increasing size and quality of dwellings.
3 Demand for unsubsidized dwellings fell by 5 000 behind the Government target
of 25 000.
4 In 1967, the rate of growth of public consumption had been inflated by the
delivery of naval vessels to the Government (worth Fl. 300 million or 2.5 per cent of total
public consumption) and that of private consumption by the temporarily reduced level
of spending in early 1966 following the boost from the tax-induced advance purchases
of late 1965.
Table 2
Gross Fixed Asset Formation
1964
Percentage change in volume from previous year
Fl. Million
at current
Preliminary
1965
1966
1967
prices
Forecast
estimates
1969
1968
(unrevised)
By type:
Building and construction
8 473
4.1
6.8
12.7
7
4
Dwellings
2 897
11.5
7.0
15.2
6
2
Non-residential building
3 224
2.3
Other construction and works
2 352
Total machinery and equipment
Transport equipment
Machinery and other equipment
7 007
5.8
11.1
11.71
0.5
10.3/
5.5
0.8
103/4
6'/2
6.5
16V2
3Î/2
2 028
11.5
4 979
3.4
9.4
15 480
4.9
6.2
Government
3 047
2.2
Enterprises1
7 536
5.5
2 680
8.5
12.4
Total fixed asset formation
V/2
6
81/2
8
7.2
814
5!/2
0.4
13.0
12J/4
7.5
3.0
By sector:
of which :
Public enterprises
1
Excluding residential construction.
Sources :
Dutch Submission to OECD and Centraal economisch plan, Central Planning Bureau.
8
7
6
OECD Economic Surveys
Table 3
Current Building Indicators
1964
1965
1966
1967
1968
Dwelling construction (units):
Starts
108 799
120 908
114 536
134 733
127 200
Underconstruction (end ofperiod)
Completion
143 517
100 978
148 466
115 027
140 572
121699
145 016
127 433
148 500
122 729
Building orders received by architects
(Fl. million):
Total
of which:
5 848
6 542
6 641
6 818
dwellings
3 113
3 312
3 788
3 342
industrial
620
747
544
720
Value of newly licensed
projects (Fl. million)
Total
of which:
Source :
building
6139
6 847
8 203
10152
9 973
dwellings
2 526
3 152
3 454
4 331
4 420
industrial
675
825
1 065
911
766
Maandstatistiek van de industrie and statistisch bulletin, Central Bureau of Statistics.
ratio from 27.5 per cent to more than 28 per cent1.
The proportion of
real income eroded by price increases was of the same order of magnitude
(3 per cent) as in 1 967.
Supply
The stronger expansion of demand in 1968 stimulated foreign more than
domestic supply.
In volume terms, the rate of growth of total imports
doubled to more than 1 1 per cent while the increase of the domestic product
accelerated only fractionally from 5.3 per cent in 1967 to 5.8 per cent.
value terms, both components of supply showed similar increases.
In
It is to be
noted, however, that in 1967 the effects of weather and other special cir¬
cumstances are estimated to have inflated the growth of domestic output
by more than one percentage point and that in 1968 growth exceeded the
capacity rate by perhaps as much as 1.5 percentage points.
The acceleration of domestic production resulted from a steeper upward
trend of industry and private services which more than offset the sharp
reduction of growth of agricultural and building output.
The shrinkage
1
The rise would have been more pronounced had it not been for a vigorous
increase in hire-purchase. Consumer credit is estimated to have increased by half a
billion guilder or 0.5 per cent of GNP.
10
Netherlands
of the number of employed experienced in 1966-67 gave way to a moderate
upturn, thanks to a sharp reversal of the downward tendency of employment
in building and a continued rise in the service sector.
But in industry, in
spite of a shortening of work hours, average employment remained at the
depressed
1967 level.
The failure of demand for industrial workers to
respond to the vigorous business upswing is the more remarkable in as
much as labour hoarding had already been greatly diminished in 1967 and
the sick-leave rate significantly reduced.
The margin of underutilized or
inefficiently used labour and capacity must still have been rather large at the
beginning of the boom period, as suggested by the unprecedented, sharp
rise of industrial labour productivity by almost 1 0 per cent following the
similarly impressive advance of 8.5 per cent in 1967.
As in 1967, an impor¬
tant structural shift of the pattern of production towards capital intensive
activities and export orientated branches also helped to keep productivity
advances above the long-term trend rate of 5.5-6 per cent.
The virtual stabilization of employment in industry in the course of
1968 and the steeper trend of productivity advances combined to accelerate
Diagram 1
Industrial Production
Seasonally adjusted, 1963 = 100
220
200
Chemicals
180
160
Basic metals
S
MO
Total industrial Production
>
120
''
.»
^*"
.»..
""
* T Metal products
Food, beverages
inn
.._.
..<
^
and tnnarra
\
Textiles, clothing and footwear
r
1
*m^^m*
L
1965
Source :
1966
1967
Industrial Production, OECD.
11
1968
1969
Table 4
Production and Employment of Enterprises
Net value
Percentage volume change from previous yeai
added in %
of national
Total enterprises
Agriculture
Industry
Building
Services
1
Employment1
Production
1966
1967
1968
1969
1964
6.5
5.0
1.5
1.0
2.5
1966
1965
85.5
8.0
6.0
3.0
5.5
8.9
11.5
1.0
-^.0
10.5
33.3
7.5
7.0
5.5
5.0
9.0
7.5
1.0
1.0
0
7.8
17.0
6.0
6.0
12.0
6.0
4.0
5.0
3.0
2.5
35.5
6.5
6.0
3.0
3.5
5.0
4.0
2.5
2.5
2.0
Average number of employed persons, including self-employed.
Source :
1965
1964
1964
Nationale rekeningen, Central Bureau of Statistics; Centraal economisch plan, Central Planning Bureau.
1.5
0.7
-^1.5
--3.5
1967
1968
1969
0.5
1.5
3.0
4.0
1.5
1.5
1.5
1.5
Netherlands
the rate of growth of the industrial production index from 5 per cent in 1967
to 9.5 per cent in 1968.
The performance remained rather uneven as between main branches of
industry.
Three out of thirteen branches, representing only 26 per cent of
the total index in 1967 (chemicals, public utilities and mining, including
natural gas production) accounted for more than 60 per cent of the total
increase.
Other salient features are the marked recovery of the textile,
leather and rubber industries following three years of weak or falling tenden¬
cies and the relatively moderate though steady upward trend of metal
products and machinery.
H
INTERNAL AND EXTERNAL EQUILIBRIUM
OF THE ECONOMY
A combination of advantageous factors on the demand and supply side,
coupled with a favourable policy setting, made for a further improvement of
Diagram 2
External and Internal Equilibrium of the Economy
Percentage Change per Annum in Terms of GDP or Previous Year
%
30
Import* of good*
Exportm of good*
and norWactor
and non-factor
*trv/c«*
j»rWc«s
Prlc« rUm
Dotmsttc
Rtaf dom**ttc
6.8
20
6.7
7.5
8.7
4.6
3.9
,
4.7
2.6
3.0
2.8
2.7
3.0
19.4
6.4
0.2
3.4
5.2
'0.2
9,6
9.7
7.4
»-2
7.4
5.3
5.3
1960
Source :
1961
1962
1963
1964
1965
1966
1967
1968
Nationale rekeningen CBS; Centraal economisch plan 1969, CPB.
13
OECD Economic Surveys
the overall balance of the Dutch economy in 1968.
The acceleration of
total demand brought about a reversal of the downward tendency of employ¬
ment and, helped by a marked shift towards capital intensive activities,
stimulated productivity.
The pressure on prices was eased by a stabilization
of unit labour costs, falling import prices, favourable harvests in both 1967
and 1968 and a slower expansion of consumption.
The restoration of an
external equilibrium was assisted by the unexpectedly vigorous expansion
of Dutch export markets, a substantial increase of export capacity and a
relative improvement of the Dutch price/cost position vis-à-vis foreign com¬
petitors.
The Labour Market
Contrary to earlier forecasts and estimates, the labour situation im¬
proved conspicuously in 1968, notably in the latter part of the year.
The
ratio of registered unemployment to the dependent labour force, seasonally
adjusted, receded from its previous peak of 2.6 per cent in September 1967
to 1.8 per cent in January 1969.
Over the same period, the seasonally
adjusted ratio of unfilled vacancies to the number of totally unemployed
persons almost trebled to 2.0, though this is still low in comparison with the
excessive ratio of 4 registered three years ago.
In judging the recent favourable developments in the labour market a
few points should be borne in mind.
First, the growth of total manpower
supply accelerated from 15 000 in 1967 to 28 000 in 1968, but still fell short
of the estimated normal rate of 40000 (including net migration gains).
Second, due to a shortening of the military period, the government sector
absorbed about 6 000 man years less than previously.
Third, government
employment programmes and special measures have contributed impor¬
tantly to the reduction of unemployment.
The projects supported or car¬
ried out by the public sector in 1968 are estimated to have created over
8 000 man years of employment.
Fourth, despite the concentration of
employment policy on development areas, unemployment has remained
unevenly spread, with unemployment ratios at the beginning of 1969 be¬
tween 1 per cent in the western provinces of the Netherlands and 2-3 per cent
in the southern and northern regions.
Incomes, Costs and Prices
The slowing down of wage and salary increases continued in 1968.
With a persistent reduction of work hours (more than 0.5 per cent per
annum) the increase in the total gross wage and salary bill per employed of
the enterprise sector amounted to 6.5 per cent following advances of 8.5 per
14
Netherlands
Diagram 3
The Labour Market
Seasonally adjusted figures
Thouson(/x
150
.
Jobs vacant
%«
"'
X.N
\
100
Unemployment
0
u
J F M A M J
JASONDJFMAMJ
1965
Source :
JASONDJFMAMJJASONDJFMAMJJASONDJFM
1966
1967
1968
1969
Main Economic Indicators, OECD.
cent and 10.5 per cent respectively in 1967 and 1966.
The moderation of
wage increases was reflected in lower wage drift and other incidental com¬
ponents. Average negotiated pay increases per employed person resulting
from annual contracts (5 per cent) and longer-term contracts (6 per cent)
were only fractionally smaller than in 1967 and, allowing for carry-over
effects, rose almost at the same rate as a year earlier1. The same is true for
employers' contributions to Social Security which inflated the total wage
bill by 1.3 per cent.
The rise in total earnings per employed was almost matched by the
progress in labour productivity.
In manufacturing, labour costs per unit of
output even showed an absolute decline of 1 per cent following a relatively
small increase of 2 per cent in 1967. This was a remarkable achievement
seen against average annual increases of more than 6 per cent during the
1963-1966 period and it also compares favourably with unit labour cost
1 Taking into consideration the negotiated reduction of the work week by 1 .4 per
cent, increased holidays and fringe benefits, the increase in hourly earnings resulting from
annual contracts works out at 6.9 per cent or 1 per cent more than following from longerterms contracts.
15
Table 5
Prices and Wages
Indices, 1963 = 100
1968
1967
1964
1965
1966
1st
2nd
3rd
4th
qtr.
qtr.
qtr.
qtr.
1st
2nd
3rd
4th
qtr.
qtr.
qtr.
qtr.
Year
Year
Wholes ale prices :
106
108
114
115
115
115
115
116
118
118
118
117
118
106
107
111
109
108
107
109
110
108
109
108
108
108
Total
106
110
116
120
119
120
121
122
125
123
125
125
127
Non-food
105
109
115
121
119
120
121
123
126
125
127
126
128
Food
107
111
118
120
118
119
121
121
123
121
121
123
125
Imports
102
103
104
103
104
103
102
102
100
101
99
100
100
Exports
102
104
104
104
104
103
104
104
102
103
101
102
103
116
128
141
150
147
149
153
153
162
157
161
163
165
Manufactured goods
Raw materials and intermediate
goods
Consumer prices :
o\
Average value indices :
Wages :
Hourly
rates
in industry
Source :
of male
workers
Main Economic Indicators, OECD.
Netherlands
Table 6
Components of Wage Changes per Worker
Percentage change over previous year
Total increase
New contracts
Rent compensation
19641
1965
1966
15.0
10.7
10.5
11.6
3.5
0.8
2.0
1968
1969
8.5
6.5
8.5
4.7
4.4
6.P
5.61
1.3f
2.0
Bonus payments
Leave allowance
1.6
Incidental
0.7
Social Security allowances
0.4
Weather differential
0.6
Carry-over from previous year
0.9
1
2
1967
1.8
1.8
.
1.4
1.5
1.9
1.2
1.3
0.6
1.0
0.7
1.1
1.3
0.8
Including government sector.
Excluding carry-over of 0.9 percent to 1970.
Source :
Centraal economisch plan, Central Planning Bureau.
increases of 0.5 per cent recorded on average by Dutch foreign competitors
in 1968.
Considering the stabilization of unit labour costs, the virtually un¬
changed interest level and the fall of import prices, the behaviour of domestic
prices was less satisfactory in 1968.
Agricultural producer prices declined
by about 10 per cent in response to the good harvests in 1967-68 but the
wholesale price index of manufactured goods went up by some 2 per cent
and the building cost index based on new contracts for standardized social
dwellings by as much as 7.5 per cent.
The cost of living index rose some¬
what faster (3.7 per cent) than in 1967, with the stronger rise of the food and
rent component offset by a slower price increase in other categories.
Accord¬
ing to the Central Economic Plan 1969, less than a third of the consumer
price increase was accounted for by autonomous measures or incidental
factors (rent adjustment, indirect taxes, EEC price measures, import prices,
weather) suggesting a strong recovery of profit margins and pointing to the
passing on to prices of previous cost increases.
As a result, gross earnings (wages and salaries including employers'
contributions to Social Security) per employed rose significantly less in real
terms (3 per cent) than average labour productivity (GNP per employed
person) with the shift of income distribution in favour of income other than
from dependent labour continuing1.
The ratio of gross earnings to the net
value added of the enterprise sector, which had steadily mounted from
1 The distribution between disposable wage and non-wage income does not seem
to have changed much owing to the effects of tax changes and progression.
17
OECD Economic Surveys
52.2 per cent in 1960 to 61.7 per cent in 1967, dropped to 60.5 per cent in
1968 suggesting a considerable easing of the earlier squeeze on profit mar¬
gins1.
Balance of Payments
The progress achieved since mid- 1967 towards reconciling the main
internal economic policy aims
capacity rate of growth, full employment
and reasonable price and cost stability
has been accompanied by a strength¬
ening of the external position of the Netherlands.
The export boom coupled
with the favourable development of domestic costs and export prices has
helped to shift the current balance of payments into small surplus.
At the
same time, the high net outflow of private long-term capital was sharply
reduced.
The loss of official reserves (before pre-payments of government
debts to the U.S. and transactions with the IMF) of about $100 million in
1968, after an increase of $170 million a year earlier, was due to the fact
that the important influx of both monetary and non-monetary short-term
funds was reversed.
Following the reduction of the current deficit from some $200 million
in 1966 to $84 million in 1967, the balance switched into a surplus of about
$60 million in 1968.
The swing could have been much less marked had it
not been for the tax-induced anticipatory imports in late 1967 estimated at
$90 million.
But the repercussion of the anticipated purchases from abroad
on the actual level of imports in 1968 was largely offset by exceptionally
high purchases of foreign cars and aircraft, suggesting that the small current
surplus actually produced in 1968 may have been only slightly inflated.
It
should be noted that the surplus was still well below the official forecast, let
alone the target of 1 per cent of national income.
The rather erratic move¬
ment of imports and the effect of special factors makes it difficult to discern
the underlying trend of the current balance during the adjustment period
which began in 1966.
But the movement of rough seasonally adjusted
figures suggests that there was little, if any, strengthening of the current
position in the second half of 1 968.
The improvement of the current balance of payments in 1968 as a
whole was fully accounted for by the fall of the trade deficit (f.o.b.) to the
lowest level registered since 1962.
was the highest since 1960.
The export/import ratio of 96 per cent
The traditional surplus on services contracted,
however, following some temporary recovery in 1967.
Receipts of invest-
1
In 1967 the labour income ratio (including imputed employers' remuneration)
had exceeded the 100 per cent mark in some branches of industry (textiles, clothing, shoes
and transport).
18
Table 7
Balance of Payments
S million
1963
1964
1965
1966
1967
19681
1
Exports, f.o.b.
4 768
5 486
6 096
6 462
6 865
7 784
2
Imports, f.o.b.
5211
6 233
6 610
7 096
7 423
8 110
3
Trade balance
518
578
567
478
537
430
4
Services, net
of which:
Travel
Freight and Insurance
302
377
376
392
360
379
Investment Income
178
204
204
161
248
197
75
6
Balance on goods and services
Transfers, net
7
Current balance
8
Long-term capital
(a)
Private
5
of which:
Credits
9
122
-A4
61
49
48
88
121
16
73
152
89
103
78
-^0
76
-A
34
84
15
Official
Basic balance
78
10
Non-monetary short-term capital
26
53
11
Errors and omissions
151
77
12
255
64
13
Balance on non-monetary transactions
Summary financing:
Private monetary institutions' short-term capital
14
Official settlements
237
1
2
104
15
Direct Investment
Securities
(b)
47
53
Preliminary.
Excluding prepayments of Government debt 165 million.
Source :
De Nederlandsche Bank N. V.
29
71
132
162
39
43
9»
171
1021
111
18
247
72
42
Table 8
Imports by Main Commodities and Countries
Percentage changes from previous year
SITC
Weight
group
1968
Food
0
12.2
14.0
Crude materials
2
9.8
8.8
Mineral fuels, etc.
3
10.1
5.3
6.9
Chemicals
5
8.1
14.2
22.1
Manufactured goods
6
21.9
13.6
24.6
Machinery and transport
7
24.2
15.5
Miscellaneous
8
10.1
100
1964
1965
1966
1967
1968
15.4
2.8
4.2
11.6
10.3
30.3
2.0
1.6
average
6 years
9.7
8.8
8.2
0.9
13.0
8.7
5.5
13.3
16.7
11.3
14.7
15.4
6.6
8.5
0.1
12.5
11.0
10.9
6.3
7.0
1.1
12.6
8.9
18.5
28.8
18.3
21.9
2.8
14.3
17.4
11.6
18.3
5.7
7.4
4.0
11.5
9.8
26.4
17.3
18.2
3.1
12.8
6.4
15.7
12.2
Belgium-Luxembourg
18.0
9.4
18.0
7.9
3.9
1.1
United States
10.9
7.9
19.8
France
6.5
23.6
21.8
United Kingdom
5.5
11.2
17.2
Total
Germany
o
1963
Source :
Statistics of Foreign Trade, Series B, OECD.
18.9
21.4
5.2
0.7
10.0
8.6
8.2
14.5
9.5
13.7
16.0
10.2
5.0
Netherlands
Diagram 4
Foreign Trade
Seasonally adjusted monthly averages
$ million
900
800
.J
Imports c.i.f.
COO
^m
*
400
300
Exports f.o.b.
k
0
-100
Trade balance (f.o.b. - c.i.f.)
-150
I
II
III
1962
*
IV
I
II
III
1963
IV
I
II
III
IV
1964
I
II
III
IV
I
1965
II
III
1966
IV
I
II
III
IV
1967
I
II
III
1968
IV
I
II
1969*
January and February only.
Source :
Main Economic Indicators, OECD.
ment income remained virtually unchanged, but out-payments rose sharply
and foreign tourist spending in the Netherlands rose much less than Dutch
travel expenditure abroad.
The changes in other service categories and
transfers were of minor significance and more or less balanced out.
The sharp reduction of the long-term capital outflow in 1968 seems to
have reflected mainly incidental shifts.
The exceptionally high 1967 deficit
on direct investment account was brought down to a more normal size and
the high outflow of long-term bank funds did not continue.
The portfolio
investment balance was shifted back into surplus owing to important issue
activity of Dutch firms on the Euro-bond market.
21
On the other hand, long-
OECD Economic Surveys
term lending and borrowing to and from abroad was greatly reduced,
eliminating the previous surplus, rather than an underlying tendency.
Export Performance
The vigorous recovery of German imports, the strong import pull from
France and boom conditions in the United States combined to accelerate
the rate of growth of Dutch commodity exports (customs basis) from about
8 per cent in 1967 to 14.5 per cent in 1968.
of exports to the BLEU.
There was also a marked pick-up
The acceleration of exports was rather unevenly
spread as between main commodity groups.
Food exports were boosted
by another good harvest and exports of mineral fuels and related products
benefited from the extension of oil refining capacities and the natural gas
supply network.
The previous marked shift of the pattern of exports
towards chemicals continued.
As in 1967, Dutch exports rose faster than average (weighted) total
imports of main customers.
The Netherlands' share in total OECD exports
increased from 5.2 per cent in 1967 to more than 5.3 per cent in 1968, thus
fully regaining the ground lost during 1965-66.
Except for the special case
of the BLEU1, this applies to all major Dutch export markets.
Looking
further back, it can be seen from table 9 that between 1962 and 1968, the
gains of market shares by the Netherlands vis-à-vis her OECD competitors
were concentrated in Germany, France and Italy.
Export shares in the US
and the UK changed little and there was some shrinkage in the EFTA
countries and Belgium.
In Tables 10a and 10b, the comparative Dutch export performance in
main geographical and commodity markets is considered by allowing for
differences in the export pattern between the Netherlands and the OECD
average2.
A comparison of lines 2 and 3 of total exports suggests that the
Dutch economy benefited from a relatively favourable commodity and/or
regional export structure in the 1963-1965 period but was clearly disfavoured
by it in 1966 and 1967, largely because of the slack in Germany, which is
the Netherlands' biggest export market.
Since Dutch exports grew on
average at a slower rate during the 1963-1965 period than export markets3,
1
With the dismantling of customs duties and other trade restrictions within the
EEC, the former preferential position of the Netherlands in the BLEU has gradually
disappeared.
2 The analysis is based on the "combined commodity and regional constant share
approach" discussed in the OECD Economic Survey on the Netherlands, April 1967,
pages 25-29 and Annex,
3 Growth of total OECD exports weighted by Dutch commodity exports structure
in each of the selected main regional markets.
22
Table 9
Dutch Shares in OECD Exports
1968
1967
weight1
1962
1963
1964
1965
1966
year
w'orld
OECD Total
EEC
to
1st half
1st half
5.24
100.0
5.20
5.16
5.33
5.33
5.09
5.20
5.07
82.2
5.90
6.34
6.59
6.42
6.06
6.14
5.95
6.17
54.9
9.04
9.77
10.51
10.38
9.98
10.28
9.95
10.50
EFTA
18.1
6.26
6.25
5.92
5.89
5.64
5.65
5.39
5.81
Germany
26.1
13.64
15.43
15.84
15.16
15.03
16.33
16.00
16.53
Belgium/Luxemburg
18.00
14.7
18.95
19.08
19.11
18.09
17.52
18.05
18.06
France
9.2
6.84
7.65
8.50
8.38
8.02
8.22
7.47
8.57
United Kingdom
8.8
8.18
7.79
7.30
7.39
7.00
7.30
6.86
7.66
Italy
4.9
3.84
4.57
6.05
6.66
6.04
6.03
5.66
6.30
United States
4.7
1.93
2.11
2.06
1.84
1.91
1.95
1.92
1.88
Sweden
2.9
7.32
7.50
6.39
6.22
6.19
5.99
5.53
5.95
13.00
0
Food and live animals
22.4
11.06
10.85
10.48
11.22
10.32
11.60
11.40
1
Beverages and tobacco
1.3
4.64
3.19
3.56
3.81
3.69
3.76
3.90
3.98
2
8.0
3.23
4.42
4.67
4.89
5.18
5.30
4.92
4.79
4
Crude materials, inedible, except fuels
Mineral fuels, lubricants and related materials
Animal and vegetable oils and fats
5
6
3
7
8
9
7.9
14.62
12.54
13.12
13.37
11.37
12.19
11.63
13.18
0.8
7.71
6.95
5.73
6.47
7.33
7.68
7.23
10.36
Chemicals
12.3
5.67
5.66
5.77
6.28
6.52
7.05
6.92
7.52
Manufactured goods classified chiefly by materials
Machinery and transport equipment
Miscellaneous manufactured equipment
Commodities and transactions not classified according
19.2
3.89
4.29
4.44
4.41
4.37
4.43
4.42
4.42
20.4
3.19
3.41
3.88
3.50
3.31
3.08
3.10
3.01
6.5
3.63
3.55
3.70
3.97
3.90
3.87
3.89
3.80
1.2
9.61
3.26
3.20
2.96
3.12
4.00
3.61
3.79
to kind
1
Percentage distribution of Dutch exports in 1967.
Source :
Statistics of Foreign Trade, Series B, OECD.
Table 10o
Comparative Export Performance in Commodity Markets
Changes in per cent from previous year
Food
Mineral
Fuels
Chemi
cals
Semimanufac¬
tures
Machinery
Others
Total
and
transport
equipment
SITC
1963:
1
1965:
to
-p>.
1966:
1967:
1968:
1
3
5
6
7
9.8
16.5
16.5
9.7
12.1
12.6
10.0
10.7
11.5
8.8
10.1
5.8
8.6
8.9
5.0
19.7
19.6
9.4
1,2,4,8,9
8.2
3
Dutch exports of
Market growth of1
OECD exports of
1
Dutch exports of
2
3
Market growth of1
OECD exports of
11.6
0.2
18.8
19.2
15.5
12.8
0.4
17.5
15.3
12.9
1
2
3
Dutch exports of
Market growth of1
OECD exports of
13.0
5.3
21.9
12.2
0.9
12.5
10.1
11.8
5.4
13.1
14.3
14.4
8.4
11.9
5.5
3.3
12.0
13.1
11.9
1
Dutch exports of
16.9
6.5
7.7
12.2
2
Market growth of1
6.2
1.0
11.6
7.2
12.0
10.0
3
OECD exports of
8.6
3.5
12.6
7.5
14.0
10.0
16.7
17.0
4.3
2.0
7.3
7.9
0.3
12.1
9.1
8.0
1.9
4.0
8.8
8.1
2.9
9.5
15.9
16.6
24.1
12.3
12.0
10.2
14.5
2
1964:
0
1
Dutch exports of
2
Market growth of1
3
OECD exports of
1
Dutch exports of
22.9
12.9
28.4
17.7
17.1
16.4
14.1
Rates of growth of OECD exports of each commodity group weighted by the Dutch regional export structure of each commodity group.
Source ;
Statistics of Foreign Trade, Series B and C, OECD.
8.8
13.4
10.1
5.6
8.4
10.6
5.6
Netherlands
there seems to have been a deterioration of the Dutch competitive position
followed by a conspicuous improvement in 1967 and 1968.
Thus the in¬
crease in Dutch export shares in total OECD exports between 1962 and 1965
was probably fully accounted for by favourable structural factors; the mark¬
ed fall of the export share in 1 966 was probably a result of both structural
and competitive disadvantages, and the subsequent rise was associated with
marked gains in most regional commodity markets, pointing to a strengthen¬
ing of the overall competitive position1.
As between main commodity groups, the basic situation and trends
have been rather different.
Chemicals constitute the only clear case of con¬
tinuously growing Dutch market shares in virtually all main markets since
1964.
Food exports have gained some ground on average, despite the set¬
back caused in 1966 by the foot-and-mouth disease.
The sales performance
of semi-manufactures (SITC section 6) has been rather uneven over the past
few years, though modest inroads into market shares of other OECD
countries have been made between 1962 and 1968.
On the other hand, the
comparative export performance of Dutch electrical machinery and trans¬
port equipment industries appears to have started deteriorating after 1964
when the expansion of foreign sales fell distinctly below the growth of
markets.
Exports of mineral fuels and related products, which contracted
between 1962 and 1966, have since been inflated by the rapid increase of
natural gas supply
a factor which also in future years will make for in¬
creasing Dutch market shares in energy products2.
HI
ECONOMIC POLICY
The general orientation of policies remained expansionary in 1968, but
a strong fiscal drag acted as an important stabilizer.
were kept easy.
Monetary conditions
Measures to combat regional and structural unemploy¬
ment were reinforced, deficit spending continued with increased resort to
short-term borrowing.
abandoned.
Strict government control on wages was formally
With the economy nearing boom conditions, the unemploy¬
ment problem has been reduced to the hard core of structural difficulties.
But the improvement of the balance of payments is still considered in¬
adequate by the Dutch authorities, and with prices expected to rise much
1
The Dutch export performance also depends heavily on the degree of capacity
utilization or the level of unemployment.
2 Foreign exchange receipts from natural gas supply increased from about $15 mil¬
lion in 1967 to $70 million in 1968 and are expected to double in 1969.
25
Table 106
Comparative Export Performance in Regional Markets
Changes in per cent from previous year
1963:
1964:
1965:
1966:
1967:
1968:
Belgium
Luxemburg
France
UK
Italy
US
38.0
1.7
35.1
3.8
Developing
countries
8.2
12.8
12.0
10.9
17.1
12.4
10.5
14.2
14.0
14.4
10.6
10.3
8.7
6.7
14.9
10.1
6.3
6.9
21.1
5.3
8.4
11.8
2.9
0.6
19.0
7.6
5.4
26.1
9.1
3.1
5.6
4.0
13.0
23.6
10.4
9.1
5.5
16.2
21.9
8.8
28.7
15.2
26.2
OECD exports to*
6.1
14.1
21.7
9.0
26.2
4.8
5.2
Dutch exports to
Market growth in1
21.8
19.0
31.6
11.4
17.9
10.2
16.0
17.9
15.8
16.0
3
OECD exports to
18.6
21.6
18.4
18.8
1
2
Dutch exports to
Market growth in1
13.6
7.2
4.8
4.6
19.3
14.3
5.1
3
OECD exports to
18.6
10.1
6.3
7.2
11.7
3.0
10.2
13.2
3
Dutch exports to
Market growth in1
OECD exports to
2.3
3.2
10.7
16.8
4.7
Market growth in1
3
1
2
1
Total
1.7
10.2
6.6
Dutch exports to
Others
10.0
15.5
1
2
2
Ni
ON
Ger¬
many
10.1
6.8
8.8
13.7
9.7
8.4
10.6
1
Dutch exports to
5.4
10.9
16.0
14.9
11.6
1.9
10.8
7.9
2
Market growth in1
2.6
8.1
14.1
14.3
8.6
3.1
5.4
3.9
3
OECD exports to
2.3
8.2
12.6
15.2
9.0
4.9
1
Dutch exports to
11.1
31.2
10.7
11.7
27.2
6.2
3.6
14.5
21.9
1
Rates of growth of OECD exports to each regional market weighted by the Dutch commodity export structure of each regional market.
2
Excluding Japan.
Source ;
Statistics of Foreign Trade, Series A, B and C, OECD.
5.6
Netherlands
faster than previously, the general line of demand management has recently
been shifted towards restriction.
Public Finance
The public sector continued to lend strong support to economic activity
in 1968 but the overal expansionary net impact on the economy was clearly
diminishing.
The contribution of general government spending on goods
and services (central and local authorities)1 to the growth of GNP at current
(and constant) prices declined from 2.5 (2.1) percentage points in 1967 to
2.2 (1.7) points in 19682.
Owing to an unexpectedly sharp upturn of tax
revenue, total government saving grew faster than investment, boosting the
traditional surplus on income effective transactions from Fl. 0.5 billion in
1967 to Fl. 0.9 billion in 1968, or in terms of GNP by more than 0.5 per cent.
With net capital transfers remaining unchanged, the financial surplus in¬
creased by more than Fl. 400 million (rise in net claims) and with govern¬
ment lending also running at about the same level as in 1967, the overall
deficit before debt redemption on a transactions basis was reduced by about
the same amount.
But mainly because of an increase of tax arrears, the
cash deficit turned out to be almost as large as in 1967 (Fl. 3.8 billion or
4.6 per cent of GNP) with the portion financed through liquidity-creating
operations being stepped up from Fl. 750 million in 1967 to Fl. 1 300 in
1968
i.e. to almost the same level as in 1966.
Central Government*
Initial budget estimates were substantially exceeded in 1968.
The total
rise of expenditure accelerated from 11.5 per cent in 1967 to almost 15 per
cent and the growth of receipts from 11.7 per cent to 15.5 per cent, leaving
the deficit before debt redemption virtually unchanged at the 1967 level
(Fl. 1.6 billion or 1.8 per cent of GNP) and Fl. 0.6 billion below the original
estimate.
Expenditure on behalf of education and science, social affairs,
transportation and public works showed the biggest increases.
The over¬
stepping of initial appropriations (Fl. 0.9 billion) resulted mainly from
higher salaries, extra spending in connection with unemployment relief
measures and additional transfers to local authorities and other public
bodies.
1
2
Including government imports.
The 1967 contribution rate was inflated by the delivery of naval vessels to the
government.
3
Recent data on Local Government and Social Security are not available.
27
OECD Economic Surveys
Table 1 1
General Government Account
(excl. Social Security)
Fl. billion
Total
1
1966
1967
1968
1969
Taxes and duties
18.1
20.4
23.1
26.4
(a)
Direct
10.3
11.6
12.8
14.2
(b)
Indirect
7.8
8.8
10.3
12.2
2.2
2.5
2.5
2.7
20.3
22.9
25.6
29.1
12.1
13.3
14.4
15.7
8.4
9.3
10.1
11.1
2
Other current receipts
3
7
Total current revenue (1+2)
Consumption
of which:
Salaries
Other current expenditure
Total current expenditure
Saving (3-6)
8
Net investment
9
Income effective surplus (7-8)
Capital transfers net
Financial Surplus (9-10)
Lending and participation
Overall balance (transaction basis) (11-12)
4
5
6
10
11
12
13
14
Overall balance on cash basis
15
Increase in liquid assets
14 and 15 financed by:
(a) Capital market borrowing
(b)
Cash and short-term borrowing
Source :
4.9
5.6
6.2
6.9
17.0
18.9
20.6
22.6
3.3
4.0
5.0
6.5
3.0
3.5
4.1
4.7
0.3
0.5
0.9
1.8
0.4
0.5
0.5
1.2
0.0
0.4
0.6
3.0
3.1
3.1
2.9
0.0
0.1
0.3
0.2
2.1
3.3
2.8
2.9
1.4
0.7
1.3
0.2
Centraal economisch plan, Central Planning Bureau
In Tables 12 and 13, an attempt has been made to assess the economic
impact of the Central Government's budget on the economy.
In Table 12,
a distinction has been drawn between discretionary changes and changes
resulting from the automatic response of revenue to the growth of the eco¬
nomy and the trade cycle.
In Table 13, changes in government expenditure
and receipts are classified by principal economic categories.
Allowance has
been made for foreign transactions and purely financial transactions having
no immediate impact on domestic activity.
It can be seen from Table 12 that the discretionary or policy-induced
expansionary impact of budget changes resulting from the increase in
expenditure (adjusted for certain economically irrelevant items) and the
new tax measures was bigger in 1968 than in 1967.
In terms of the previous
year's GNP, the impulse (excluding multiplier effects) works out at more
than 3 per cent, compared with 2.5 per cent and 3.1 respectively during the
preceding two years.
But the counterbalancing automatic fiscal drag (line 8
of Table 12), which increased very little in 1967, doubled in 1968, suggesting
that total budgetary support to economic activity has continued to diminish.
28
Table 12
Central Government Budget Changes
Fl. million
A
Discretionary Budget Changes :
1
Rise in total expenditure
2
Adjustment items1
3
Rise in relevant expenditure (1 + 2)
Revenue changes from new tax measures
(a) Tax rates
4
(b)
5
1966
1967
Actual
Provisional
1 880
2 223
236
204
2116
2427
4)
in per cent of previous year's relevant expenditure
in per cent of previous year's GNP
1969
Revised
estimates
proposals
3 130
2150
2 430
2150
550
580
380
Tax collection
Total discretionary impact (3
1968
Preliminary
40
550
200
2121
1 847
2 590
1 600
13.3
10.2
12.6
7.0
3.1
2.5
3.2
1.7
1463
1022
3 080
1383
366
6
249
1 162
1 388
3 086
1632
7.4
8.3
16.5
7.5
1.7
1.9
3.8
1.8
K>
B
Automatic Revenue Changes :
6
Rise in ordinary receipts at unchanged rates
7
Rise in other revenue
8
Total fiscal drag (6 + 7)
in per cent of previous year's receipts
in per cent of previous year's GNP
1
Debt repayments, transactions with the IMF, participation in capital issues, shifts of expenditure between local and central government, and spending due to "liquidity"
guarantees vis-à-vis the Bank for Netherlands Municipalities and to the Law on Continued Education.
Source :
Miljoenennota; Nationale rekeningen; Centraal cconomisch plan.
Table 13
Change of Central Government Expenditure and Receipts by Economie Categories
(+ = increase)
Fl. million
1966
1
Expenditure on goods and services1
Salaries
Other consumption
Investment
2
3
Current transfer payments
Total income effective spending (1 4- 2)
4
5
in per cent of previous year's GNP
Current receipts
Surplus of income effective transactions (4 - 3)
(a)
ë
internally effective*
6
7
Net capital transfer payments
Financial surplus (5 - 6)
8
Lending and participation, net
9
Excess spending
(a)
net borrowing requirements (8
(a) internally effective * * *
of which: short-term financing
10
1969
Revised
estimates
proposals
914
615
800
355
421
208
360
^14
280
130
270
72
213
277
170
1391
1275
1885
1425
1 774
2189
2 500
2 225
2.6
2.9
3.0
2.5
1852
1957
3 200
2 240
78
700
25
148
1070
105
300
490
312
-103
400
31
910
649
7)
1968
Preliminary
383
181
internally effective* *
1967
395
752
190
702
539
400
280
600
100
1
Net of receipts from sales.
2
Adjusted for expenditure shifts from Municipalities to Central Government due to Special Medical Expense Act and transactions with abroad other than direct government
imports.
3 Excluding spending due to Secondary Education Act.
4 Excluding certain other purely financial transactions.
Source :
Ministry of Finance and Secretariat estimates.
Netherlands
Similar conclusions can be drawn from the presentation of budget
changes in Table 13, where all the relevant internally effective balances
moved into a restrictive or less expansionary direction in 1968.
Following
a sharp decline of the traditional surplus on income effective transactions
(line 5) in 1967, which was associated with a slower growth of financial
assets (line 7) there was a recovery of both balances in 1968, notably marked
if allowance is made for the budget effects of economically irrelevant ex¬
penditure items.
The growth of the internally effective financial surplus in
1968 was much bigger than the simultaneous increase in lending and parti¬
cipation to the domestic sector, involving a sharp reduction of the internally
effective budget deficit (line 9a). However, the restrictive or less expansion¬
ary impact of the principal budgetary balances in 1968 was counteracted by
the stimulus provided to the economy through the means by which the over¬
all budget deficit was financed.
In spite of higher overall borrowing, the
Central Government reduced its recourse to the capital market and im¬
portantly increased its resort to money market financing
i.e. to liquidity
creating operations (see line 10).
Compared with the 1968 probable outcome, the 1969 budget estimates1
seem to imply a further shift towards more restrictive policies.
Total ex¬
penditure is estimated to increase by less than 9 per cent over actual spending
in 1968 and receipts to exceed last year's result by more than 10 per cent.
The deficit before debt transactions works out at about Fl. 1.9 billion;
but with greater recourse to the capital market, the government
intends
to refrain from any important money market financing of the deficit.
The original and supplementary budget proposals include a number of
new tax measures expected to yield additional receipts of Fl. 640 million
in 1969, of which about Fl. 550 million will accrue to the Central Govern¬
ment.
The switch to the net value added tax system will involve tax gains
(partly non-recurrent) of about Fl. 350 million, outstripping the envisaged
tax loss of Fl. 200 million resulting from the degressive increase of taxexempt basic income for earnings up to Fl. 27 000.
The rise in the excise
duty on tobacco with effect from 1st January 1969, and in other indirect
taxes on petrol, fuel and alcoholic drinks, as from 1st July 1969, is expected
to bring additional Fl. 190 million.
The change of the taxation of life
insurance companies and the advanced abolition of the investment tax
credit will yield extra Fl. 140 million and Fl. 160 million respectively.
1
Based on the initial budget draft presented to Parliament in last September and
proposed amendments up to April.
31
OECD Economic Surveys
The new tax measures combined with the sharp slowing down envisaged
in the rise in expenditure would reduce the expansionary impact resulting
from discretionary budget changes from 3.2 per cent in terms of GNP in
1968 to 1.9 per cent in 19691. This should be almost matched by the auto¬
matic increase of revenue which, on the basis of the original conservative
estimate of the growth of GNP of 8 per cent, works out at 1.8 per cent of
GNP.
Borrowing requirements for covering the internally effective deficit
are forecast to change little, following the sharp reduction in 1968.
It seems likely that the actual outturn of the 1969 budget may prove
restrictive rather than expansionary.
With the economy growing much
faster than originally forecast, tax receipts should exceed estimates by an
important margin, enabling the government to finance unbudgeted pay
claims and leaving enough room to cut borrowing below last year's level.
Particular efforts are, apparently, to be made to avoid the over-spending of
appropriations.
It was agreed in January that any non-wage spending by
an individual department in excess of initial estimates would be offset by
economies elsewhere.
Monetary Policy and Banking
After abolishing the restrictions on credit expansion to the private
sector in the summer of 1967, monetary conditions were kept relatively easy
until late 1968, when new measures of restraint were taken.
In December,
the Bank Rate was raised by 0.5 point to its pre-March 1967 level of 5 per
cent, and the growth of short-term credit2 for the first four months of 1969
was restricted to 6 per cent of the average credit outstanding in SeptemberDecember 1968.
Moreover, banks have been requested to keep the exten¬
sion of long-term credits in line with development of long-term deposits.
The ceiling for short-term credit to local authorities has been raised from
105 (peak position at end-July 1966 = 100) to 110.
In January, the obli¬
gatory downpayment on hire purchase was raised from 20 to 25 per cent of
the credit, with the maximum term limited to between 18 and 24 months.
The expansion of personal loans by money-lending institutions has been
restricted to a maximum of 12 per cent per year.
Commercial and agri¬
cultural banks have also been requested to adhere to this norm.
At the
beginning of April, the Bank Rate was raised by another 0.5 point.
The degree of restraint implied by these measures appears to be im¬
portant, especially if seen in conjunction with the Government's decision
to abstain from liquidity-creation in its financing operations.
1
2
Final estimates were not yet available at the time of writing.
With a currency period up to two years.
32
The credit
Netherlands
limit fixed for the first four months of 1969 corresponds to a seasonally
adjusted rate of about 3.3 per cent.
This is in line with the forecast growth
of nominal GNP: with little or no net liquidity creation expected through
other channels, and assuming a continuation of the present restrictions
through 1 969, the rate of growth of total liquid assets of the economy would
just about match the foreseen rate of growth of real GNP.
In early 1969,
potential credit demand was probably particularly high in response to the
tax-induced price increases.
On the other hand, the amount of outstanding
credit in the reference period was rather high and the liquidity position of
the private sector relatively comfortable.
The effects of the credit restriction
may therefore be rather gradual, with the impact on investment probably
not being felt before the second half of the year.
In 1968, the growth of total domestic lending by commercial banks and
other financial institutions probably exceeded the rate of 18 per cent re¬
corded in 1967.
The expansion of commercial bank credit lost momentum,
however, with a further relative shift from medium to short-term lending,
suggesting a comfortable liquidity position in the enterprise sector and a
higher degree of self-financing.
Commercial bank capital market lending,
both in the form of direct loans and security purchases, continued to rise
rapidly and almost doubled between 1966 and 1968.
New issue activity on the capital market, which had changed little in
1966 and 1967, showed some buoyancy in 1968.
Table 14
Private issues recovered
Commercial Banks' Lending
Fl.
million
Percentage changes
from end of previous year
Dec.
1966
1967
18 837
12.7
21.6
14.9
13 686
12.2
22.3
20.0
10 891
6.8
23.7
22.3
2 795
34.9
17.7
11.8
5 151
13.9
20.1
3.4
7.2
1968
Claims on domestic non-banks
Private sector
short-term
medium-term
Government
central
3 996
7.4
24.2
local
1 155
34.9
9.2
Domestic
capital market
1968
3 096
25.5
47.4
Private loans
1697
72.6
72.5
Securities
1399
1.2
25.2
22.0
18.6
21933
Total credit
Source :
10.5
Maandstatistiek financiewesen and Statist isch bulletin, Central Bureau of Statistics.
33
OECD Economic Surveys
partly from their setback in 1967 and foreign issues regained their 1965
level.
The Bank for Netherlands Municipalities and the government sector,
the two most important borrowers, reduced their recourse to the capital
issue market slightly.
Table 15
Market Issues of Shares and Bonds1
Fl. million
1964
1965
1966
1968
1967
Public authorities
Bonds
652
505
448
791
728
421
648
834
950
925
Bonds
206
759
870
358
456
Shares
210
129
69
60
148
56
104
50
108
Bank for Netherlands Municipalities
Bonds
Private sector
Foreign
Bonds
.
Shares
Total
1545
2145
2 221
2 209
2 365
Bonds
1335
2016
2152
2149
2 217
Shares
210
129
69
60
148
1
In the Netherlands by far the greater part of long-term lending is made directly rather than through
market issues.
Source :
Maandstatistiek financiewezen, CBS, Statistisch bulletin, CBS.
With deposits rising at about the same rate as a year earlier (18 per
cent) the liquidity position of the commercial banks appears to have im¬
proved somewhat.
The incremental domestic deposit
lending ratio in¬
cluding capital market borrowing and lending went up from 0.84 in 1967
to 0.99 in 1968.
The overall liquidity position of the economy appears also
to have improved on average as suggested by the over-proportional increase
in the total volume of liquidity in relation to the growth of GNP.
The
national liquidity ratio in per cent of national income went up by 1.5 points
to 37.5 in 1968 following an increase of 0.5 point in 1967.
The downward tendency of short-term interest rates experienced in
1967 continued during the early part of 1968 but has since given way to a
renewed up-turn; this reflected not only developments abroad but a gradual
tightening at home accentuated in December by the increase of the official
discount rate.
Long-term bond yields, similarly, had been easing off up
to the autumn of 1967 but have since resumed a moderate upward trend; in
January they were 0.25 to 0.5 per cent higher than a year earlier.
34
Netherlands
Table 16
Causes of Changes in Domestic Liquid Assets
Fl. million
1965
1
1966
1967
1810
2 060
2 680
3 900
Government
400
650
520
1 100
local authorities
220
730
230
110
at short term
660
550
2 080
2120
at medium term
480
530
270
280
490
100
570
1140
(d)
money-creating institutions net
transactions on the capital market (purchases +)
increase ( ) in "real savings" at commercial
(e)
increase (
Domestic creation of liquidity
19681
of which due to:
(a) transactions with public authorities
(b)
lending to the private sector
(c)
banks
) in capital and reserves of money-
creating institutions and sundry items
Net purchase of foreign exchange
3
Changes in domestic liquid assets (1 + 2)
of which :
(a) domestic money supply
(b) secondary liquid assets
(c) "liquid savings" at commercial banks
1
310
80
2
1 890
1790
2 990
2 830
1700
1 190
1 170
2170
140
550
1780
1 510
50
50
40
150
Provisional figures.
Source :
De Nederlandsche Bank N.V.
Incomes Policies
The Dutch Government moved towards a free wage policy in 1968.
The system of prior approval of collective agreements by the Foundation of
Labour (the top council of the two sides of industry) came practically to an
end in December 1967.
Pending the introduction of a new legal framework,
the Foundation of Labour and the National Board of Mediators, which had
previously exercised the wage control, continue to act as advisory bodies to
the Government and between the two sides of industry.
The Minister of
Social Affairs and Public Health has retained the power to invalidate col¬
lective agreements, if they endanger the economic situation1:
In September 1968 a draft bill on Wages was submitted to Parliament.
It aims at providing the legal framework to the new system of free wage
policy.
1
The most important provisions are:
A committee of five independent experts has been appointed to advise the
Minister.
35
OECD Economic Surveys
Diagram 5
Interest Rates
a/>
.7
'
...
/^'
\&
V
r\\
i
/
i/
:
/
"V
tf
iA
/
\
\!
f
/-\
A r^
i
/
^
( v \»
/**
1 u
^
Privât* bond* 1
Euro-bond» *
^
^mm^^
-
Govmmmmnt bondi
Discount rof*
Euro-dollar deposits in London
Treasury bills (3 months)
2
o
±
L
1964
1
2
3
1965
1966
Average of 3 quotations.
Average of 4 quotations.
Average of 9 quotations.
Sources:
Maandschrift, CBS; Financial Times.
36
1967
1968
1969
Netherlands
(i)
Wage agreements can be invalidated by the Minister of Social
Affairs on grounds of general social and economic requirements
after consulting the Committee of Independent Experts;
(ii)
Wage agreements can be prolonged by the government in special
circumstances for a maximum period of six months after prior
consultations with the Committee of Independent Experts, the
Social Economic Council and the Foundation of Labour;
(Hi)
The system of prior government approval of wage agreements
could
as a last resort
be introduced; parliamentary approval
would, however, be needed within three months of its intro¬
duction.
The draft law is expected to pass Parliament in the course of this year.
The rise in total earnings per employed person in 1968 was officially
assumed to be 5 per cent with a 3 per cent increase implied for new annual
wage contracts.
Actual increases, however, exceeded the target.
In March,
the government invalidated agreements for a shortening of work hours in
the building and related industries and urged that forthcoming contract
renewals should not involve wage increases of more than 7 per cent.
In
May, the government announced that it would prolong by six months all
wage contracts coming up for renewal in 1969, but strong parliamentary
opposition caused this plan to be withdrawn.
The wage increase of 6.5 per cent in 1968
target
though exceeding the official
was well within the overall advance of industrial productivity, in¬
volving a marked decline of unit labour costs in industry.
The pay claims
tabled at the beginning of this year's wage round are much higher than pre¬
viously and, with the growth of productivity likely to be less spectacular,
there has been growing concern in government circles that this may jeopard¬
ize the progress made during the last couple of years towards a healthier
balance of the economy and improved competitiveness.
According to
"target-setting" projections established in the summer of 1968, the official
balance-of-payments aim of running a current surplus of about 1 per cent
of national income (in conditions of full employment and reasonable price
stability) could be achieved by 1971 if average wage cost increases per
But the collective
employed person did not exceed 6.5 per cent per annum.
agreement concluded last December in the engineering and ship-building
industries, the traditional wage leaders in the Netherlands, may lift total
gross earnings per employed by some 9 per cent over the 1968 level.
The
government decided, after consulting the Independent Advisory Committee
on Wages, that the Minister of Labour would not use his power to invalidate
the contract.
To limit the inflationary effect some of the above mentioned
restrictive measures in the fiscal and credit field were taken.
37
OECD Economic Surveys
Since the beginning of the year, the authorities have also adopted a
more active price policy especially with a view to preventing unjustified
upward price revisions in connection with the changed turnover tax system.
Industry and trade have been urged to observe the official directives con¬
cerning the calculation of the value-added tax.
The sharp rise of the index
for prices of household consumption in January indicated that prices had
risen significantly more than was to be expected on grounds of tax increases
and other autonomous factors.
In a number of cases, the Minister has
fixed price ceilings and certain branches have reportedly reduced prices on
request of the Minister. Furthermore, the government is supporting con¬
sumers organisations in their activities to provide consumers with price
comparisons and other market information designed to stimulate compe¬
tition.
The continued rise of the cost of living index in February (0.9 per cent)
and March (0.7 per cent) finally prompted the government to resort to a
general price freeze in early April.
It has been decreed that the prices for
all goods and services be fixed on the level of March 14.
Prices which at
that date exceeded their October 1 level by more than the amount due to
tax rate changes and external cost increases are to be brought back into line.
Given the temporary nature of this measure, no exceptions are to be granted.
The staff of the government service charged with price control will be doubled
from 200 to 400 people.
IV
1969 TRENDS AND PROSPECTS
This year's official outlook is again for a continued satisfactory growth
of the economy without undue pressure of demand.
But with wages ad¬
vancing much faster than productivity and an increased level of indirect
taxes and incidental factors, prices are expected to rise much faster than
previously.
In these circumstances, the balance of payments may show
little, if any, further improvement.
The Central Economic Plan for 1969,
finalized in January and published in March, proceeds from a number of
basic assumptions about foreign and domestic developments1. Externally,
the weighted volume growth of foreign demand is foreseen to be only
slightly lower than in 1968, with continuing high demand from Germany
compensating for most of the expected slowdown of exports to France and
the United Kingdom.
Competing foreign exporters are expected to raise
their prices by about 1 per cent on average in 1969, and it is thought that
Dutch exporters will follow suit, especially as unit wage costs are expected
1 The Central Planning Bureau is presently considering establishing a revised Plan
for 1969 to take account of the stronger than earlier expected rise of prices.
38
Table 17
Economie Plans 1966-69
1966
1967
1968
1969
Provi¬
Forecast
Actual
sional
Forecast
Feb. 1968
outcome
Percentage change from previous year
Basic assumptions
Abroad :
7
Volume of world imports (weighted)
Import price level
Export price level of competing countries
Unit wage costs in manufacturing abroad (S)
4
5
10
9
0.7
1.5
0.5
2.5
2
0.5
0.5
2.5
Domestic :
Public consumption other than wage and salary payments
(nominal)
Gross public investment (nominal)
Residential construction (volume)
Wage bill per worker in enterprises, incl. social charges
7.2
8.5
6.5
6.5
7.0
16.5
9.5
16.5
7.0
15
1.1
8.5
5
8.5
14
6
2
6.5
8.5
1.3
0.3
level
Liquidity creating
(Fl. million)
finance
by
the
government
sector
1.4
0.8
1.0
Percentage change from previous year
Results
Abroad :
Volume of exports
Volume of imports
6.5
7.5
8
13.5
6.3
6
6
11
Prices of commodity exports
0.1
1
10
8.5
1
Domestic :
Volume of private consumption
3.0
3.5
4.5
Volume of gross fixed asset formation in the enterprise
sector (excl. residential construction)
Volume of production in enterprises
Volume of gross national product
7.6
3
0
8
2.2
5.5
4
6.5
5
2.0
5.5
3.5
5.5
4.5
Consumer prices
5.8
3
3
3
5
Labour productivity in enterprises (incl. self-employed)
1.5
6.5
3.5
6
3.5
Unit wage costs in manufacturing
6
2
0.5
1
4
0.25
0.30
6
level
Current balance of payments (Fl. billion)
Trade balance (Fl. billion)
Changes in stocks (Fl. billion)
Unemployed (1 000)
Labour's share in enterprise income (per cent)
National liquidity ratio (per cent of GNP)
Savings (per cent of GNP)
Tax revenue (per cent of GNP on transactions basis)
1
0.50
0.9
1.1
Centraal economisch plan 1968 and 1969, CPB.
39
1.3
1.7
86
90
81
55
78
77
77
75.5
76.5
36.5
37
37.5
37.5
36.0
18.5
19.5
19
21
21.5
26.5
27.5
27.5
28
28.51
Taking into account the reimbursement of turnover taxes on stocks in 1969 (Fl. 0.6 billion)
Source :
0.9
45
OECD Economic Surveys
to increase more than in other countries (4 against 2.5 per cent). Anti¬
cipating an upward trend of raw material prices, import prices have been
estimated to increase by 1 per cent. Among domestic "exogenous" factors,
the wage and salary increase per worker is forecast to accelerate to 8.5 per
cent, in response to tightening labour market conditions and a steeper trend
of consumer prices. The real rise of the "autonomous" component1 of
total final demand (nearly 16 per cent of GNP in 1968) is estimated to fall
from almost 8 per cent in 1968 to less than 5.5 per cent.
On the above assumptions, and considering the steeper trend of prices,
the contribution of all "endogenous" expenditure components to the growth
of real GNP is also officially forecast to decline. The volume growth of
Dutch commodity exports has been put at 10 per cent, implying some
further gains of market shares.
The competitive position vis-à-vis German
suppliers is expected to improve as a consequence of border tax changes,
and natural gas exports are forecast to double. Next to exports and govern¬
ment fixed capital formation, productive investment, encouraged by the
greatly improved profit and liquidity situation in 1968, should continue to
provide a stimulus to the expansion.
The effect on investment activity of
the recent restriction of fiscal incentives and the squeeze on bank credit is
thought to be felt only gradually.
In spite of a virtually unchanged trend
of average real gross earnings and a faster rise in employment, the volume
growth of private consumption is forecast to slow down to 4 per cent in
response to the curb on consumers' credit and a slower advance of non-
wage income.
The relatively high level of consumers' spending in latel968
(due to expectations of price increases) should also make for some slowing
down.
The slower growth expected in output of domestic enterprises reflects
limitations on the supply side rather than insufficient demand.
With the
possible exception of agriculture, all main sectors of the economy are likely
to advance at a slower pace. While employment should rise faster than pre¬
viously, the average labour productivity increase is expected to return to
the longer-term trend rate of 3.5 per cent2. With a reversal of the downward
tendency of industrial employment, the average level of unemployment is
foreseen to drop from 81 000 in 1968 to 55 000 or 1.5 per cent of the de¬
pendent labour force.
This estimate includes the assumption that the favour¬
able situation on the labour market will elicit about 15 000 additional job
seekers with the demographic growth of active population (30 000) remaining
virtually unchanged.
1
Public investment and public consumption other than wages and salaries, and
residential construction ; the share of these three items in the total is roughly of the same
order.
2
Eliminating the uneven influence of weather the "underlying" rate of growth of
productivity is however assumed to remain above 4 per cent.
40
Netherlands
The slowing down of productivity advances and the steeper trend of
wages are expected to raise unit labour costs in manufacturing about 4 per
cent above last year's level; and with no productivity increase foreseen in
the building sector, considerable upward pressure on building costs may
develop.
The rise in the consumer price index1 was originally expected to
accelerate from 3.7 per cent in 1968 to 5.5 per cent in 1969; the Plan ascribes
the whole acceleration
and half the total increase
to policy measures and
special factors (tax and other measures, rent, import prices and weather
conditions).
The effects of the faster rise of unit labour costs are assumed
to be offset by less buoyant or falling profit margins2.
Thanks to the favourable export prospects, the deterioration of the
internal financial balance may not be accompanied by a weakening external
position.
The slight improvement predicted in the trade balance would be
offset by a further moderate decline of the traditional surplus on invisibles.
In contrast to the previous couple of years, it is thought unlikely that there
will be a further improvement of the terms of trade.
Foreign exporters are
expected somewhat to increase their shares in the Netherlands domestic
market; and imports may further be stimulated by higher stockbuilding.
In view of the tightening credit conditions at home, the net outflow of private
capital is not expected to continue in 1969.
Government capital exports
are planned to be stepped up, possibly counterbalancing the surplus on
current account.
In view of the recent policy changes in the fiscal and monetary field
and given the difficult international payments situation, the degree of un¬
certainty contained in this year's estimates seems to be particularly high.
On present trends, the official outlook for 1969 may perhaps underestimate
the underlying expansionary strength of the economy.
While a marked
decline of labour productivity increases seems plausible, not all the factors
which boosted productivity above the long-term trend in 1967 and 1968
may cease to operate in 1969, and the carry-over effects from last year
should delay the assumed return to a normal trend rate.
The expansion
of industrial production accelerated during the closing months of 1968.
In February the seasonally adjusted index of industrial output per working
day, exceeding the average 1968 by as much as 6.3 per cent, almost attained
the forecast 1969 level.
1
Based on 1964 consumption pattern of worker families of 4 persons with maximum
annual gross incomes of Fl. 10,500.
2 According to more recent estimates, the rise of consumer prices is put at 7 per
cent and can be split as follows: 1.4 per cent due to the introduction of value-added tax,
1 .5 per cent to unit labour cost increases, 2.4 per cent to increased profit margins, 0.5 per
cent to EEC measures and 1 .2 per cent to various other reasons (rent adjustment, harvest,
etc.).
41
OECD Economic Surveys
On the demand side, the expansion of exports and investment may
perhaps turn out somewhat stronger than officially assumed.
As can be
seen from diagram 4, exports have until recently maintained a steep upward
trend exceeding in March (seasonally adjusted) the average 1968 level by
as much as 1 3.7 per cent.
The postulated cut of growth of public invest¬
ment from 13 per cent (in volume) in 1968 to 7 per cent does not allow for
the overspending of budget estimates.
Statistics on private productive invest¬
ment up to the fourth quarter of 1 968 point to a stronger investment boom
than estimated, but the credit squeeze may be felt earlier than anticipated
by the Plan.
The growth of real private consumption will largely be de¬
termined by wage and price movements.
The official forecast of an 8.5 per
cent average gross pay increase in 1 969 implies some moderation of wage
increases for pending agreements which seems doubtful, given the unex¬
pected upsurge of prices.
Also, the possibility of a reopening of wage
negotiations for already concluded contracts cannot be ruled out. Much
will depend on whether the rise in consumer prices can now be kept down
to the revised forecast year-to-year rate of 7 per cent.
In the light of the
sharp rise between mid-December and mid-March (5.2 per cent), which
brought the cost of living index 6.9 per cent on the average 1968 levels and
7.7 per cent up on March 1968, this seems difficult.
In these circumstances,
the prospects of maintaining the surplus on current account at last year's
level may not be particularly favourable.
Some Longer-term Aspects
Since the middle of 1968, the Dutch economy has been following a
trend which deviates substantially from the medium-term target projections
laid down in the summer of last year.
The projections were designed to
illustrate the conditions under which the economy could move gradually
towards an overall balance which would reconcile the main macro-economic
policy aims.
(/")
They were based on a number of "exogenous" assumptions:
An average annual expansion of Dutch export markets by 7 per
cent in volume;
(;'/')
Average
annual
increases of unit
wage costs
in
competing
countries of about 2.5 per cent;
(Hi)
Virtually stable raw material prices;
(/v)
A stringent budget policy, implying a slower expansion of real
government expenditure than previously, allowing for a gradual
abolition of the investment tax credits and the turnover tax on
investment goods, and partial compensation for the fiscal drag
which results from price increases;
42
Table 1 8
Central Economic Plans and Medium-Term Forecasts
Medium-Term Forecasts
Central Economic Plan
Average
1968
1969
results
Prov.
Forecast
19551965
(autumn 1968)
1968
outcome
Jan.
Jan. 1969
1969
Esti-
1970
1969
1971
Targets
Rise of gross earnings per employed (per cent)
8.0
6.5
8.5
6.5
6.5
6.5
6.5
Rise of consumer prices (per cent)
Current balance (Fl. billion)
3.5
3
5
3
4
3.5
2.5
Unemployment (thousand)
Volume growth of productive investment (per cent)
Volume growth of enterprise production (per cent)
Change in relative cost position of manufacturing1 (per cent)
National liquidity ratio (per cent of GNP)
1
Differences in movements between foreign and domestic unit labour costs.
Source :
Centraal economisch plan, CPB.
0.45
0.25
0.3
0.5
6
6
9
9
6
4.5
5
5.5
0
0
0
37
37
37
5.5
8
6
4.5
6.5
5
37.5
+0.5
36.0
0.8
60
85
42.5
0.8
65
55
+ 1.5
0.7
75
80
50
37
OECD Economic Surveys
(v)
A building programme aiming at starts of 125 000 dwelling units
per annum ;
(vi)
An average annual rise of gross wage bill per employed person
of 6.5 per cent;
(vii)
A total annual increase in the labour supply of 45 000 with the
trend towards a shorter working week continuing.
On the basis of these assumptions, the rate of growth of enterprise production
would be stabilized at around 5 per cent per annum, with the level of un¬
employment gradually brought down to 60 000 by 1971 and the rise in con¬
sumer prices to 2.5 per cent.
The current balance of payments was fore¬
seen to improve rapidly, running at a level of almost 1 per cent of national
income at factor cost during the 1969 to 1971 period.
A comparison of provisional 1968 results and recent estimates for 1969
with the medium-term projections shows that the trend of production and
demand has been steeper than was foreseen earlier, with unemployment
diminishing much faster.
The increase in wages is likely to exceed the
postulated rate of 6.5 per cent by some two points in 1969 and consumer
prices are also expected to show a substantially faster advance.
In 1968,
the current balance of payments' surplus turned out to be smaller than was
estimated in the summer, and prospects for an improvement in 1969 are
rather
weak.
This
deterioration
of the
external and
internal
financial
balance of the economy led the authorities to tighten financial policies
and to reinforce price control measures.
The liquidity squeeze and the steep rise in consumer prices are likely
to have important repercussions on developments in 1970.
The restrictive
impact of this year's fall of the liquidity ratio on next year's gross fixed
capital formation has been officially estimated at Fl. 350 million for pro¬
ductive investment and Fl. 1 50 million for other types of asset formation.
The deflationary impact on real earnings of the unexpectedly sharp rise in
prices may make it difficult to count on a moderation of wage claims next
year.
There may, thus, be grounds for considering whether the require¬
ments for the external balance and the economic growth objective can be
achieved next year with the present policy mix.
V
CONCLUSIONS
From mid- 1967 through 1968, the overall performance of the Dutch
economy was quite satisfactory.
With GDP growing in the last two years
at an average rate of over 5.5 per cent in real terms, slack was absorbed
44
Netherlands
and, more recently, unemployment fell rapidly.
Between 1966 and 1968,
the growth of labour productivity quadrupled to an annual average of more
than 6 per cent (about 9 per cent in industry), the pay increase was brought
down from 1 1 to 6.5 per cent and the price deflator for consumption from
almost 6 to 3 per cent. The current balance of payments deficit of Fl. 700 mil¬
lion in 1966 (nearly 1 per cent of GNP) was replaced by a surplus of
Fl. 250 million in 1968.
The relative cost position of Dutch industry vis-
à-vis foreign competitors stopped deteriorating in 1967 and improved in
1968. Both years saw Dutch exports growing faster than foreign markets.
Trends in 1969 are likely to be much less favourable.
are for a satisfactory rate of growth (about 5 per cent).
The prospects
But prices have
risen disquietingly fast since the beginning of the year, partly in response to
tax measures and perhaps also in anticipation of rising wage costs. The
new wage agreements to date embody average gross pay increase of 8 to
9 per cent (including employers' contributions to Social Security).
With
productivity unlikely to advance as fast as previously, the competitive posi¬
tion of Dutch industry, both at home and abroad, may weaken.
And with
foreign demand probably less buoyant than in 1968 and less elastic supply
conditions at home, the improvement in the current balance of payments
may not continue.
Since the economic upswing was well established and demand for labour
sufficiently strengthened, the authorities shifted policies into a restrictive
direction in late 1968.
Budget estimates for 1969 point to a sharp reduction
of the expansion of public spending; and tax measures recently taken or
announced entail a significant increase of the national tax ratio.
Various
restrictive credit measures have been taken since December, and the govern¬
ment's decision to reduce sharply its liquidity-creating finance operations
should add to the tightening of the capital market during 1969.
of the new policy decisions is difficult to assess.
initial estimates
The impact
Spending in excess of the
rather large in recent years
may not be altogether
avoided in 1969; on the other hand, tax receipts are likely to turn out higher
than foreseen.
The effect of the credit restrictions may not be felt very soon,
owing to the recent large increase in profits and the improved liquidity
position of the economy in 1968.
Given the greatly reduced margin of unused resources, the shift to less
expansionary demand management was justified.
But the policy mix applied
was not fully adequate to arrest inflationary tendencies at an early stage.
The switch since 1st January to the value-added tax system has strengthened
the upward pressure on prices.
With consumer prices in 1969 rising sub¬
stantially more than the 5.5 per cent originally postulated in the Plan, a
serious risk of a price-wage spiral began to emerge.
A further tightening of
credit conditions could, however, have undesirable repercussions on growth
45
OECD Economic Surveys
and employment and tax measures deflating consumer spending through
price increases do not seem particularly appropriate in present circumstances.
It is also to be noted that this year's real income losses for lower income
brackets resulting from the higher indirect tax burden have been offset by
the recent increases of tax-free allowances.
In order to arrest the risk of a price-wage spiral, the authorities attach
special importance to price and incomes policies.
Price surveillance and
control have been progressively extended, culminating in the recent decree
of a general price freeze.
Such measures of control may be appropriate in
present circumstances, though they are of an essentially temporary nature.
Despite the free wage policy adopted since the beginning of 1968, the govern¬
ment also retains powers of intervention in the wage field which the new bill
on wages aims at legalizing.
Much will depend, of course, on the degree of
co-operation shown by the two sides of industry.
But earlier experience
suggests that with cost-push factors operating in conditions of relatively
buoyant demand, the effectiveness of incomes policies may be limited.
The present difficulties should not be exaggerated.
The Dutch economy
has shown in the past remarkable resilience during periods of wage and
price pressures and its productive potential has strengthened in recent years.
Nevertheless, prudent economic policy should take account of the fact that
the current balance of payments is less strong than in the early 'sixties and
that the level of wages is closer to that prevailing in the main competing
countries. The main problem of the near future will be to apply, in the light
of current developments, a policy mix combining a reasonable degree of
demand restraint with appropriate fiscal and price policies which would
limit the effects of cost-push elements.
Successful efforts in this direction
would prevent the risk that financial equilibrium could only be sought at the
expense of lower growth and employment.
According to earlier commitments, there will be across-the-board
income tax reductions worth some Fl. 0.9 billion in 1970-71, to compensate
for the combined effect of inflation and progressive tax rates on tax pay¬
ments during the current cabinet period (1967-71). To offset part of the loss
in income tax revenue, the government is considering increasing the value-
added tax and some excise duties as from 1st January, 1970.
However
strong the arguments in favour of the official aims concerning the structure
of tax revenue, the timing of the implementation should be chosen with due
regard to the needs of demand management.
If demand and cost pressures
continued to be appreciable towards the end of the year, it would be advis¬
able to spread as far as possible over time the planned reductions of income
tax, and also to match any such reductions by cuts in expenditure rather
than by increases of indirect taxes.
46
STATISTICAL ANNEX
LU
CD
<
û.
<
Où
Table A
National Product and Expenditure
Million Fl. current prices
1960
-fe.
1961
1962
1963
1964
1965
1966
1967
1968
1969
preli¬
minary
official
forecasts
55 320
Consumers' expenditure
Government current expenditure
24169
26 045
28 369
31523
35 654
39 842
43 390
47 040
50 620
5 803
6 362
7 138
8 190
9 726
10 834
12 090
13 350
14 360
15 740
Gross fixed asset formation
10 073
10911
11 611
12 383
15 480
16 984
18 950
20 990
23 280
25 550
Enterprises
8 323
8 964
9 447
9900
12 487
13 748
15 490
16 960
18 580
20 200
Government
1 750
1947
2164
2 483
2 993
3 236
3 460
4 030
4 700
5 350
Change in stocks
1415
1268
764
479
1 851
1332
900
1 100
1300
1800
National expenditure
41460
44 586
47 882
52 575
62 711
68 992
75 330
82 480
89 560
98 310
Exports of goods and services (non factor)
21 270
21 350
22 705
24 577
28 125
30 934
32 860
34 810
38 690
42 610
Less : Imports
(non factor)
20 376
21244
22 454
24 921
29 373
31316
33 770
35 640
38 670
42 510
42 354
44 692
48 133
52 231
61463
68 610
74 420
81650
89 580
98 410
3 674
4 037
4 381
4 788
5 616
6409
7 260
8 240
9 750
11630
378
596
384
627
691
627
390
620
400
400
of
goods
and
services
Gross domestic product
at
market
Less :
Net
prices
Net indirect taxes
income
from
the rest
of the world
Gross national product
at
factor
cost
Less : Depreciation and other operating
provisions
39 058
41251
44136
48 070
56 538
62 828
67 550
74 030
80 230
87180
3909
4 206
4 545
4 940
5 459
6 010
6 580
7 200
7 700
8 270
35 149
37 045
39 591
43 130
51079
56 818
60 970
66 830
72 530
78 910
Net national income
at
factor
Source :
cost
Nationale rekeningen 1967, CBS and Centraal economise)! plan 1969, CPB.
Table B
National Product and Expenditure
Million Fl. 1963 prices
1960
1962
1963
1964
1965
1966
1967
1968
1969
preli¬
minary
forecasts
official
26 290
27 720
29 430
31 520
33 410
35 760
36 810
38 700
40 430
7 120
7 360
7 680
8 190
8 330
8 460
8 650
8 990
9190
9 380
10 930
11 650
12 150
12 380
14610
15 320
16 270
17440
18 920
19 890
Enterprises
8 990
9 530
9 870
9900
11 830
12 480
13 420
14 220
15 300
16040
Government
1 940
2 120
2 280
2 480
2 780
2 840
2 850
3 220
3 620
3 850
Change in stocks
1420
1 220
760
480
1 740
1 210
780
950
1 100
1430
National expenditure
45 760
47 950
50 020
52 570
58 090
60 750
62 510
66 080
69 640
72 810
Exports of goods and services (non factor)
Less :
Imports of goods and services (non
21400
21 850
23 280
24 580
27 510
29 570
31 310
33 080
37 030
40 380
20 070
21330
22 750
24 920
28 710
30 440
32 600
34 670
38 380
41740
47 090
48 470
50 550
52 230
56 890
59 880
61 220
64 490
68 290
71450
400
630
410
630
680
570
350
540
330
350
47 490
49 100
50 960
52 860
57 570
60 450
Consumers' expenditure
Government current expenditure
Gross fixed asset formation
o
1961
factor)
42 110
Gross domestic product at market
PRICES
Net income from the rest of the world
Gross national product
at
market
Source :
prices
Nationale rckcningcn 1967, CBS and Centraal cconomisch plan 1969, CPB.
61 570
65 030
68
620
71 800
Table C
Origin of Gross Domestic Product at Factor Cost
Million Fl. current prices
1968
I960
1961
1962
1963
1964
1965
1966
1967
prelimi¬
nary
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Construction
Electricity, gas and water
Banks and insurance companies, and ownership
of dwellings
3 781
3 698
3 676
3 852
4 558
4 789
642
613
600
629
683
693
171
11 618
12 300
13117
15 528
2 558
2713
2 848
3 062
3 954
579
611
674
754
819
11
4 570
4 830
25 180
27 270
17 3651
4 527}938J
6 236
6 815
7 683
8 343
9 439
10 494
11410
12 350
Transport
2 709
2 639
2 816
3 168
3 696
4 130
4 310
4 870
Other services
3 201
3 461
3 775
4 151
5 001
5 549
6 360
7 160
Government
3 894
4 281
4 835
5 427
6 710
7 706
8 750
9 730
34 771
36 449
39 207
42 503
50 388
56 191
60 580
66 210
72 130
378
596
384
627
691
627
390
620
400
35149
37 045
43 130
51079
56 818
60 970
66 830
72 530
u»
Domestic product at factor cost
Net income from the rest of the world
National income
Source :
Nationale rekeningen 1967, CBS and Centrant economise!! plan 1969, CPB.
39 591
Table D
Income and Expenditure of Households and Private Non-Profit Institutions
Million Fl. current price
Compensation of employees
Wages and salaries
Employers' contributions to Social Security
Income from property and entrepreneurship
Agricultural
1961
19 886
21839
24 028
26 793
17 196
18 776
20 797
22 824
2 690
3 063
3 231
3 969
11533
11682
11976
1962
1963
1965
1966
1967
31960
36180
40 670
44 030
27 107
30 691
33 840
36 260
4 853
5 489
6 830
7 770
12 964
15 027
16 093
16 070
17 890
1964
3 003
2 862
2 809
3000
3 657
3 797
3 530
3 750
Professionals
846
920
1050
1 100
1420
1550
1730
1870
Rents
691
723
773
867
936
1000
1 180
1320
1057
1 184
1328
1493
1703
1956
2 300
2 690
Imputed interest of financial institutions
Other incomes
5 936
5 993
6 016
6 504
7 311
7 790
7 330
8 260
4 267
4 616
5 205
6 505
7 673
9 415
11060
12 700
64
97
121
117
112
121
140
160
35 750
38 234
41 330
46 379
54 772
61 809
67 940
74 780
7 288
8 084
8 727
10190
12 438
14 559
17 120
19 630
28 462
30150
32 603
36189
42 334
47 250
50 820
55 150
222
223
247
306
380
450
520
580
24
31
53
57
69
105
130
130
24 169
26 045
28 369
31 523
35 654
39 842
43 390
47 040
Food
8 930
9 635
10 268
11 361
12 302
13 692
14 807
15 598
Clothing and Footwear
3 692
3 972
4 221
4 632
5 211
5 621
5 876
6 062
Rent
1 616
1748
1 888
2 087
2 275
2 503
2 837
3 140
Durables
2 828
3193
3 660
4 205
5 050
5 886
6103
6 827
Others
7 103
7 497
8 332
9 238
10 816
12140
13 767
15 413
4 047
3 851
3 934
4 303
6 231
6 853
6 780
7400
Current transfers from government
Current transfers from the rest of the world
g
1960
Income of households, etc.
Less :
Direct taxes on households, etc.
Disposable income
Less :
Current transfers to the government
Less :
Current transfers to the rest of the world
Less :
Consumers' expenditure
Savings of household, etc.
Source:
Nationale rekeningen 1967, CBS.
Table E
Supply and Demand Indicators
Monthly averages 1963 = 100
1968
1967
1964
1965
1966
year
I
II
HI
IV
year
I
II
HI
IV
Industrial production per working day :
110
116
123
129
125
128
120
142
143
138
143
133
150
Mining, incl. natural gas
102
108
110
123
124
113
104
152
163
172
143
131
205
Public utilities
111
124
141
163
179
146
158
195
200
225
169
158
250
Manufacturing
110
116
122
126
137
137
130
140
131
150
Food, drink, tobacco
106
109
110
117
Textiles
105
101
106
Clothing and shoes
105
101
100
Paper
112
120
Leather
107
Rubber
Chemicals
Total
104
111
112
142
121
106
115
116
96
98
99
83
103
109
107
113
96
(147)
(120)
95
100
97
87
97
96
98
100
86
(100)
129
133
132
139
123
138
145
143
149
138
103
102
94
96
93
82
105
103
100
103
97
111
116
125
122
127
119
109
133
138
138
145
126
(112)
(143)
122
144
159
177
167
177
177
187
221
208
231
215
231
Oil refining
Coal processing
111
121
131
135
133
121
136
151
150
136
145
150
171
106
93
88
75
70
60
69
65
55
Stone and earth
119
124
126
132
120
140
128
138
136
130
149
131
Metals and machinery
111
116
121
125
119
128
119
133
125
136
127
101
102
101
97
98
96
97
96
95
95
96
109
114
121
132
125
131
124
147
144
149
138
Industrial employment and productivity :
Employment
Output per employed
Investment and Consumption (volume) :
118
124
131
141
125
145
142
151
118
148
151
Industry and building
Other enterprises
120
123
134
132
124
140
125
139
132
140
131
119
126
136
144
132
149
142
152
147
161
155
Government
112
114
115
130
96
130
142
151
118
148
151
106
113
117
123
116
120
122
133
122
125
127
100
107
108
112
106
109
109
121
109
111
110
Durables
111
123
123
129
114
129
126
147
122
138
132
Other
106
111
118
124
121
120
127
129
130
124
134
Gross fixed asset formation
Private consumption
Food, drink, tobacco
Sources :
Maandstatistiek van de Industrie 1969, CBS; Statistisch bulletin, CBS; Maandschrift, CBS.
150
51
(144)
Table F
The Labour Market and Employment
Thousand
1960
1961
1962
Labour force
4 231
4 278
Armed forces
130
132
Civilian labour force
4101
4 146
Unemployment*
Employment
49
35
33
34
30
35
45
86
81
4 052
4111
4 194
4 256
4 341
4 386
4 425
4 396
4 438
1964
1965
1966
4 363
4 422
4 496
4 540
136
132
125
120
4 227
4 290
4 371
4 420
1967
19681
4 593
4 608
4 638
124
126
119
4 470
4 482
4 519
465
449
436
420
408
388
375
366
359
Industry
1 715
1 749
1 790
1 820
1864
1887
1 898
1 844
1 825
Others
1872
1913
1968
2 016
2 069
2110
2 151
2 186
2 223
360
365
369
377
387
397
405
411
420
48.6
46.3
46.1
46.3
46.2
46.3
46.2
45.5
45.0
5.2
4.9
5.6
6.0
5.9
6.3
6.5
6.3
7.2
539
71
321
310
57
567
796
8 659
1 514
Agriculture and fishing
of which : Government
Weekly hours worked in industry
Sick leave in per cent of total work hours
Loss of work hours due to short-time work
en
1963
Totally unemployed
28.8
21.2
Vacancies
92.3
118.5
21.2
122.1
23.5
20.7
25.3
35.6
74.8
68.0
121.6
130.9
129.2
114.9
68.2
77.1
1
Provisional estimates.
2
Including persons registered at the Labour Exchange Office at works for additional employment or working on social provision schemes.
Source :
Labour force statistics, OECD; Maandschrift, CBS; Sociale Maandstatistiek, CBS; Statistisch Bulletin, CBS.
Table G
Prices and Wages
1968
1967
1964
1965
1966
year
1
II
III
IV
year
I
II
III
IV
Wholesale price indices (1968 = 100) :
Total
151
156
164
164
164
166
163
164
165
164
162
165
167
Food
136
146
155
154
152
163
151
149
151
147
144
153
160
Raw materials
171
174
179
176
175
173
177
177
176
177
175
176
177
Manufactured goods
151
155
163
165
165
164
165
166
168
168
168
167
168
120
Cost of living indices (1964 = 100) :
100
104
110
114
112
113
115
115
118
116
118
118
Food
100
105
110
112
110
111
113
113
115
113
113
115
117
Dwelling
100
102
106
109
108
107
110
112
114
113
113
114
115
Total
Rent, maintenance
Heating and lighting
Furniture, flowers
100
105
113
118
126
124
126
128
128
100
101
102
102
104
103
103
104
105
100
101
104
108
111
110
111
111
112
Household goods and apparatus
100
100
102
104
105
105
105
105
106
Clothing and shoes
100
104
109
114
110
116
113
116
118
114
120
116
120
Medical and health services
100
108
119
132
131
131
132
132
144
143
143
144
145
Education, recreation, transportation
100
104
112
115
114
118
116
116
118
117
118
118
119
Private insurance
100
106
108
116
113
116
116
117
118
117
118
119
119
Hourly wage rate indices (1963 = 100) :
117
129
143
152
149
151
154
154
163
159
162
164
165
Privates enterprises
116
128
142
151
147
150
153
153
161
157
161
163
164
Government
120
134
147
157
156
156
159
159
167
166
166
167
168
Total
Source :
Maandschrift, CBS; MaandsUtistiek van de Binnenlandse Handel, CBS.
Table H
Money and Banking
Million of guilders and percentages, end of period
1967
1964
1965
1968
1966
I
II
III
IV
I
II
III
IV
21661
Money Supply :
Total primary liquidity
Notes and coins
Deposit currency
Near money
15 441
17 139
18 335
18 273
19 980
19 559
19 498
19711
21 682
21 140
7 172
7 942
8 551
8 356
9 254
8 676
8 823
8 568
9 233
8 845
8 269
9 197
9 784
9 908
10 726
10 883
10 675
11 143
12 449
12 295
12 691
6 697
7 242
7 811
8 250
7 948
9 062
9 530
10 434
10 383
11 145
11
8 970
139
Domestic credit granted by commercial
banks to :
Private sector
6 947
8 317
9 238
9 794
10 273
10 803
11407
11 899
12 363
12 937
13 686
Central government
2 793
2 793
3 001
3 387
2 684
4 074
3 728
4 098
4 491
4 449
3 996
559
850
1 147
1 207
1427
1 225
1 253
1 294
1
1 329
1 155
4 627
5 175
5 235
5 329
5 793
5 965
5 623
6125
6 652
6 643
6 732
6 268
6 941
7 531
8 081
8 248
9 192
9 639
10 568
10 908
11 695
11758
Local government
161
<3\
Domestic deposits with commercial banks :
Sight deposits
Other deposits
Interest rates :
Official discount
4.50
4.50
5.00
4.50
4.50
4.50
4.50
4.50
4.50
4.50
5.00
Call money (Amsterdam)
Treasury bill (3 months)
2.09
3.47
3.68
4.57
4.38
3.69
4.05
3.10
4.69
3.73
4.86
3.68
4.29
4.90
4.64
4.56
4.48
4.51
4.34
4.56
4.39
4.65
Bond yields :
3V4 percent 1948 Government
5.25
5.89
6.24
5.83
5.97
6.03
6.11
6.12
6.24
6.25
6.34
V/2 per cent industrials
5.44
6.02
6.36
5.76
5.83
5.98
5.87
6.04
6.17
6.25
6.48
Source :
Maandschrift, CBS; Maandstatistiek Financiewezen, CBS; Main Economic Indicators, OECD.
Table 1
Central Government Budgets
Fl. million
Inter¬
Provisional
Final account
results
1963
1964
1965
1966
1967
mediate
results
1968
Initial
estimates
1969
Expenditure:
General administration
521
571
692
743
889
1057
1034
2 309
2 624
2 701
2 833
3 206
3 299
3 482
Foreign relations1
226
481
636
528
453
739
854
Justice and police (incl. civil defence)
621
670
881
904
1042
1191
1258
Transport and public works
Trade and industry
Agriculture and fishery
1 109
1270
1412
1844
1930
2 439
2611
244
276
386
372
346
537
668
807
811
909
955
1096
947
1044
Education, science, culture and recreation
2 834
3 608
4 369
5 078
5 741
6 602
7 344
Social provisions (incl. National Health)
1225
1 410
1 742
1 903
2 212
2 923
3 253
963
1 345
1664
2 097
2 373
2 534
2 439
Military expenditure
Housing expenditure
War and flood damage
National debt
Total
63
114
84
18
11
18
10
1420
1283
1425
1498
1636
1847
2 019
12 342
14 463
16 900
18 773
20 935
24133
26 093
22 511
Receipts:
Current account
10 820
12 807
14 896
16 354
17 956
20 528
Indirect taxes
4 239
5 020
5 531
6 218
6 974
8 212
9097
Direct taxes
5 719
6 916
8 326
9 051
9 734
10 734
11699
908
Income from property and entrepreneurship (incl. interest
352
322
384
462
592
798
Other current
510
549
655
623
656
784
847
Capital account
495
377
722
421
787
793
1042
11 315
13184
15 618
16 775
18 743
21321
23 553
812
540
Total
Overall balance
1
Including Surinam and the Netherlands Antilles.
Source :
Miljoenennota 1969, September 1968.
-1027
998
Table J
Merchandise Trade
US $ million
Imports c.i.f.
Total
Exports f.o.b
1964
1965
1966
1967
1968
1964
1965
1966
1967
1968
7 057.3
7 462.2
8 017.6
8 337.4
9 292.6
5 808.1
6 393.3
6 752.3
7 287.6
8 341.2
5 576.3
5 939.9
6 480.2
6 645.4
7 463.8
4 807.6
5 283.9
5 561.8
5 991.2
6 971.5
3 671.1
3 985.1
4 331.8
4 546.1
5 146.2
3 233.1
3 561.3
3 749.9
4 003.0
4 790.3
967.8
985.2
1 010.8
965.4
1060.3
1 127.7
1 210.2
1 226.8
1 321.4
1 426.4
63.1
77.0
83.2
93.8
81.2
132.9
178.0
178.1
196.9
196.1
827.7
831.0
984.4
952.9
1090.7
263.5
299.8
357.8
395.8
494.8
By area:
OECD Countries
EEC
EFTA
Other Europe
North America
Japan
Non-OECD countries
Developed countries
Eastern Europe
China Mainland
i/>
°°
Other developing countries
46.6
61.6
70.0
85.4
50.4
34.6
49.2
74.2
63.8
1 480.4
1 521.6
1 536.9
1 692.0
1 826.3
920.7
1 027.6
1115.3
119.3
1 255.7
142.7
137.3
129.7
131.6
143.4
139.5
155.9
166.5
170.2
164.2
125.2
150.8
150.5
158.8
175.4
73.9
104.4
116.5
179.6
179.0
20.0
25.4
30.2
27.8
27.1
5.9
19.0
16.1
12.2
28.9
1 192.5
1 208.0
1 226.5
1 373.8
1 480.3
701.4
748.3
816.2
831.5
883.6
856.1
1 895.3
87.1
By SITC Sections:
0
Food and live animals
879.7
917.0
1 023.2
1 129.1
1 318.1
1 489.1
1 486.6
1 634.9
1
2
Beverages, tobacco
Crude materials, except fuels
98.3
108.0
109.4
118.3
120.3
69.9
78.3
85.0
92.7
107.1
826.0
842.4
856.2
836.8
910.4
459.6
497.3
557.4
583.3
624.1
776.4
760.3
767.4
867.4
943.1
529.6
557.7
491.0
573.1
668.0
68.0
84.0
79.0
86.8
90.8
45.8
56.1
57.8
61.7
80.7
446.9
506.3
590.9
657.8
754.2
535.7
653.2
763.4
892.8
1 107.8
3
Mineral fuels, lubricants, etc.
4
Animal and vegetable oils and fats
5
Chemicals
6
Manufactured goods classified chiefly
7
by material
Machinery and transport equipment
8
9
1 561.8
1664.8
1806.3
1 808.5
2 035.4
1 121.7
1258.3
1340.1
1 397.4
1 569.8
1 736.8
1 847.0
1 976.5
1998.5
2 250.4
1 340.7
1 352.4
1 456.9
1 485.9
1664.3
Other manufactures
551.3
652.0
795.1
817.1
934.3
332.8
388.4
438.7
477.1
544.8
Other not classified
135.7
117.7
119.8
123.0
124.5
54.3
62.6
75.4
88.7
79.1
Source :
Foreign Trade Statistics, Series B, OECD; Statistisch bulletin,
CBS.
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