Django unchained

138 Pages·1984·7.527 MB·English

by  OECD

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OECD
ECGNOMBC SURVEYS
PORTUGAL
ORGANISATION FORECONOMIC CO-OPERATIONAND DEVELOPMENT
ORGANISATION FOR ECONOMIC
CO-OPERATION AND DEVELOPMENT
Pursuant lo Article 1 oftheConvention signed in Paris on 14th
December 1960, and which came into force on 30th September 1961,
the Organisation for Economic Co-operation and Development
(OECD)shallpromotepoliciesdesigned:
to achieve the highest sustainable economic growth and
employment and a rising standard of living in Member
countries, whilemaintainingfinancial stability,andthusto
contributetothedevelopmentoftheworldeconomy;
to contribute to sound economic expansion in Member as
well as non-membercountries in theprocess ofeconomic
development; and
to contribute to the expansion of world trade on a
multilateral, non-discriminatory basis in accordance with
internationalobligations.
The original Member countries of the OECD are Austria,
Belgium, Canada, Denmark, France, Germany, Greece, Iceland,
Ireland,Italy,Luxembourg,theNetherlands, Norway,Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United
States. The following countries became Members subsequently
through accession at the dates indicated hereafter: Japan (28th April
1964), Finland (28th January 1969), Australia (7th June 1971) and
New Zealand (29th May 1973). The Commission of the European
Communities takes part in the work ofthe OECD (Article 13 of the
OECD Convention). Yugoslavia has a special status at OECD
(agreementof28thOctober 1961).
Publiéégalementenfrançais.
©OECD 1992
Applicationsforpermissiontoreproduceortranslate
allorpanofthispublicationshouldbemadeto:
HeadofPublicationsService,OECD
2,rueAndre-Pascal,75775PARISCEDEX 16,France
Table of Contents
Introduction 9
I. Portugal's integration into the EC: a progress report 11
Terms of entry, EC assistance and accompanying structural policy
changes 13
Impact on external trade, product markets and factor markets 20
Progress towards real economic convergence 34
Nominal convergence 41
II. Recent economic policies 49
Budgetary policy 49
The weight of the public sector 54
Monetary and exchange-rate policy 56
Other structural reforms 64
III. Recent trends and short-term outlook: an overheated economy 68
Recent economic performance 68
The outlook to end-1993 82
IV. Conclusions 86
Notes and references 93
Annexes
1. Determinants of Portuguese Private-Sector Wages 100
II. References 102
III. Chronology of economic Events 105
IV. Supplementary Tables 111
Statistical Annex 115
Tables
Text
1. Selected infrastructural indicators: an international comparison 15
2. Financial flows with the EC 16
3. Role of EC financing in Portuguese development, 1989-93 17
4. Private-sector wages and compensation in the EC 25
5. Balance of payments over the 1980s 26
6. Composition of output and employment in EC countries 28
7. Rate of convergence of relative prices in OECD countries, 1980-85 30
8. Inward direct investment shares in OECD countries 32
9. Foreign direct investment by sector and origin 34
10. Relative labour productivity performance 37
11. Educational attainment: Portugal versus EC, 1987 38
12. General-government account 52
13. The weight of the general government 55
14. Recent credit growth 60
15. Environmental indicators: a Portugal-OECD comparison 66
16. Demand and output 70
17. Household appropriation account 70
18. Labour-market indicators 74
19. Cost and price deflators 76
20. Balance of payments 79
21. Foreign trade 80
22. The short-term outlook 84
Annex
Al. Concentration of foreign trade in smaller OECD countries 1 12
A2. Export shares by product, 1985 and 1990 113
A3. Share of intra-industry trade in intra-EC trade 114
A4. Rate of return on capital of US firms abroad 1 14
Statistical Annex
Selected background statistics 116
A. Expenditure on gross domestic product 117
B. Household appropriation account 118
C. General government account 1 19
D. Prices and wages 120
E. Civilian employment by sector 121
F. Money supply and its counterparts 122
G. Breakdown by nationality of foreign visitors 123
H. Foreign trade by main commodity groups 124
I. Geographical breakdown of foreign trade 125
J. Balance of payments 126
K. Labour-market indicators 127
L. Public sector 128
M. Production and employment structures 129
Diagrams
1. Evolution of economic performance 12
2. Importance of foreign trade 21
3. Import and export shares by main partners 23
4. Evolution of Portugal's revealed comparative advantage 24
5. Real convergence 35
6. Importance and efficiency of fixed capita] formation 39
7. Inflation differentials 41
8. Evolution of the exchange rate 43
9. Real effective exchange rate: an international comparison 45
10. The stance of fiscal policy 50
11. Money and credit 59
12. Interest rates 61
13. Exchange rate of the escudo vis-à-vis selected currencies 63
14. Macroeconomic performance 69
15. Contributions to real GDP growth 72
16. Consumer prices 77
17. Indicators of competitiveness and foreign trade 81
BASICSTATISTICSOFPORTUGAL
THELAND
Area(thousandssq.km) 92.0 Majorcities,residentpopulationinthousands(1981):
Lisbon 808
Porto 327
THEPEOPLE
Population(1990,thousands) 10390 Civilianemployment(1989,thousands) 4395
Numberofinhabitantspersq.km 113 Asapercentageoftotal:
Civilianlabourforce(1989,thousands) 4676 Agriculture 18.9
Industry 35.2
Services 45.9
PRODUCTION
Grossdomesticproductin1990 Grossdomesticproductatfactor
(millionofUSdollars) 59748 costbyorigin(1989,%oftotal):
Grossdomesticproductperheadin1990 Agriculture 6.2
(USdollars) 5751 Industry 38.1
Grossfixedassetformationin1990: Services 55.7
%ofGDP 26.9
Perhead(USdollars) 1549
IEGOVERNMENT
Publicconsumption(1990,%ofGDP) 19.6 CompositionofParliament(numberofscats):
Publicinvestment(1990,%ofGDP) 3.7 SocialDemocrats(PSD) 135
(%oftotalinvestment) 13.8 Socialists(PS) 72
GeneralGovermentcurrentrevenue UnifiedDemocraticCoalition(CDU) 17
(1990,%ofGDP) 40.5 CenterSocialDemocrats(CDS) 5
NationalSolidarity(PSN) 1
FOREIGNTRADE
Exportsofgoodsandservices(1990,%ofGDP) 37.2 Importsofgoodsandservices(1990,%ofGDP) 47.2
Mainexportsasa%ofcommoditiesexports,1990 Mainimportsasa%ofcommoditiesimports,1990
SITC: SITC:
Food,beveragesandtobacco(0,1) 6.6 Food,beveragesandtobacco(0,1) 9.7
Basicandsemi-finishedmaterials(2,3,4) 12.8 Basicandsemi-finishedmaterials(2,3,4) 16.9
Manufacturedgoods(5,6,7,8) 80.3 Manufacturedgoods(5,6,7,8) 73.3
ofwhich; Chemicals(5) 5.2 ofwhich: Chemicals(5) 9.1
Machineryand Machineryand
transportequipment(7) 19.6 transportequipment(7) 36.9
THECURRENCY
Monetaryunit: Escudo CurrencyunitsperUS$,
averageofdailyfigures:
Year1990 142.31
November1991 141.22
Note: Aninternationalcomparisonofcertainbasicstatisticsisgiveninanannextable.
This Survey is based on the Secretariat's study pre¬
pared for the annual review of Portugal by the
Economic and Development Review Committee on
18th November1991.
After revisions in the light ofdiscussions during the
review,final approval ofthe Surveyforpublication was
given by the Committeeon 16thJanuary1992.
The previous Survey of Portugal was issued in
January1991.
Introduction
When the Economic and Development Review Committee lastreviewed the
economic situation in Portugal in November 1990, it expressed concern about
excess demand pressures in both labour and product markets. Budgetary policy
had been inappropriately expansionary in 1990 but looked set to tighten some¬
what in 1991. Due to capital inflows the monetary authorities had been unsuc¬
cessful in theirattempts to tighten monetary conditions sufficiently to bring about
disinflation. The Committee recommended more restrictive stabilisation policies
in order to restore macroeconomic balance and improve inflation outcomes,
termed the major disappointment in economic performance in recent years. With
such apolicy stance domestic-demand growth was expected to ease substantially,
but output expansion was projected to be better maintained, given a smaller
deterioration in the real foreign balance. Consumer-price inflation in 1991 was
expected to recede to the 12 per cent range, after the over 13 per cent outcome
recorded in 1990, as theunemploymentrate reversed its trend decline in line with
waning job creation.
In the intervening year the economy has remained overheated. The govern¬
ment deficit has widened further in 1991, as current spending increases have
surpassed 20 percent. Although interestrates have risen in both nominal and real
terms, once again, despite the efforts ofthe central bank, liquidity increases have
been excessive as capital inflows have defied both the range of official controls
imposed in order to hinder them and sterilisation efforts to offset their effects.
Outputgrowth has indeed slowed, perhaps even morethan hadbeen foreseen, but
domestic demand has continued to expand at unsustainable rates, led by a boom
in private consumption, while merchandise-export growth has vanished. Farfrom
abating, demand for labour has picked up, and employment growth has surged,
leaving the unemployment rate below 4 per cent, one ofthe lowest in the OECD
and substantially below its sustainable level. As a result, real wage gains have