OECD economic outlook. 6.

233 Pages·1994·26.035 MB·English

by  OECD

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DECEMBER 1994
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OECD
ECONOMIC
OUTLOOK
56
DECEMBER 1994
ORGANISATION FORECONOMICCO-OPERATIONAND DEVELOPMENT
The OrganisationforEconomic Co-operationandDevelopment(OECD)
wassetup undera Convention signed in Paris on 14December1960, whichprovides that the
OECDshallpromotepoliciesdesigned:
toachieve the highestsustainable economicgrowthandemploymentanda rising standard
ofliving in Member countries while maintainingfinancial stability, and thus to contribute
to thedevelopmentoftheworldeconomy;
to contribute to soundeconomic expansion in Memberaswell asnon-membercountries in
theprocessofeconomicdevelopment; and
to contribute to the expansion ofworldtrade on a multilateral, non-discriminatory basis in
accordancewith internationalobligations.
The original Member countries of the OECD are: Austria, Belgium, Canada, Denmark,
France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, Turkey, the UnitedKingdomandthe UnitedStates. The
following countries became Members subsequently through accession at the dates indicated
hereafier: Japan (28April 1964), Finland (28 January 1969), Australia (7 June 1971), New
Zealand (29 May 1973) and Mexico (18th May 1994). The Commission ofthe European
Communitiestakespartin the workofthe OECD (Article 13 ofthe OECD Convention).
© OECD, 1994
Application forpermissiontoreproduce ortranslate
all orpartofthispublication shouldbemadeto:
HeadofPublications Service, OECD
2,rueAndré-Pascal, 75775 PARIS CEDEX 16,France.
FOREWORD
The OECD Economic Outlook provides a periodic assessment of economic trends, prospects and policies in
OECD countries. It appears twice a year, in June and December.
Each issue contains an overall analysis of the latest economic trends and short-term projections. This survey is
the joint work of members of the Economics Department. The journal also occasionally contains special studies by
members of the Department or other divisions of the Organisation designed to assist the interpretation of economic
trends. Reference statistics are included. The French version ofthe OECD Economic Outlook is entitled Perspectives
économiques de l'OCDE.
The OECD Economic Outlook is published on the responsibility of the Secretary-General of the OECD. The
assessments of countries' prospects do not necessarily correspond to those of the national authorities concerned.

TABLE OF CONTENTS
INTRODUCTION xi
OECD ECONOMIC OUTLOOK AND POLICIES 1
General Assessment ofthe Economic Situation 1
Recent Developments and Prospects 1
Uncertainties about the Projected Pattern of Growth 9
Ensuring a Durable Expansion 11
Medium-Term Developments in OECD Countries 26
Estimating Potential Output, Output Gaps and Structural Budget Balances 31
Trends in International Trade 38
DEVELOPMENTS IN INDIVIDUAL OECD COUNTRIES 51
United States 51 Australia 88 Mexico 102
Japan 57 Austria 90 Netherlands 104
Germany 62 Belgium 92 New Zealand 105
France 68 Denmark 93 Norway 107
Italy 73 Finland 95 Portugal 109
United Kingdom 78 Greece 96 Spain 110
Canada 83 Iceland 98 Sweden 112
Ireland 99 Switzerland 114
Luxembourg 100 Turkey 116
DEVELOPMENTS IN SELECTED NON-OECD COUNTRIES 119
Central and Eastern European Countries and the Russian Federation 119
China and the Dynamic Asian Economies 122
South and Central America 125
ANNEX Al
Country Classification A2
Weighting Scheme for Aggregate Measures A2
Reference Statistics and Annual Projections A3
Other Background Data A56
Sources and Methods A71
LIST OF NUMBERED TABLES AND FIGURES
OECD ECONOMIC OUTLOOK AND POLICIES
GeneralAssessmentofthe Economic Situation
Table
1. Labour markets and inflation (cid:9) 4
2. Developments in long-term interest rates (cid:9) 7
3. Trade and payments summary (cid:9) 8
4. The United States: characteristics ofcyclical peaks (cid:9) 9
5. Average household saving ratios in selected European countries (cid:9) 11
6. Output gaps in selected OECD countries(cid:9) 13
7. Real and nominal long-term bond yields (cid:9) 13
8. Actual and structural general government financial balances (cid:9) 16
9. Progress towards Maastricht fiscal targets (cid:9) 17
10. Impact of a 1 percentage point increase in interest rates at all maturities on government deficits in 1995 (cid:9) 18
11. Cumulative impact ofhigher interest rates and lower economic growth as compared to reference scenario (cid:9) 19
12. Unemployment rates and NAWRU averages (cid:9) 22
13. Employment rates and turnover ofthe pool ofunemployed (cid:9) 22
14. Decomposition ofincreased unemployment rates (cid:9) 23
Figure
1. Contributions to growth ofreal GDP (cid:9) 2
2. Inflation developments (cid:9) 5
3. Real long-term interest rates (cid:9) 10
4. Short- and long-term interest rate developments (cid:9) 14
5. Participation and employment rates (cid:9) 20
6. Real wages and employment growth (cid:9) 21
Medium-Term Developments in OECD Countries
Table
15. Medium-term reference scenario summary (cid:9) 27
16. Fiscal trends in the medium-term reference scenario(cid:9) 29
Figure
7. Medium-term reference scenario (cid:9) 28
Estimating Potential Output, Output Gaps and Structural Budget Balances
Table
17. Output gaps (cid:9) 34
Figure
8. Output gaps (cid:9) 33
9. General government structural balances (cid:9) 35
Trends in International Trade
Table
18. Structure of international trade(cid:9) 38
19. Net outstanding asset and liability positions for selected OECD countries(cid:9) 41
20. lntra-industry trade for total manufacturing (cid:9) 41
21. Intra-non-OECD trade(cid:9) 45
22. Competitiveness indicators (cid:9) 47
23. Selected economic indicators for South-East Asian countries (cid:9) 48
Figure
10. Structure oftrade in non-factor services (cid:9) 39
11. Exports ofselected non-OECD countries and regions classified by technological content (cid:9) 44
12. Direction ofnon-OECD trade (cid:9) 44
13. Shares in selected OECD markets (cid:9) 46
DEVELOPMENTS IN SELECTED NON-OECD COUNTRIES
CentralandEastern European Countries andthe Russian Federation
Table
24. Registered unemployment (cid:9) 120
25. Trade flows (cid:9) 121
26. Inflation (cid:9) 121
27. Current balances (cid:9) 121
28. Output (cid:9) 122
29. General government budget balances (cid:9) 122
China andtheDynamic Asian Economies
30. China and the Dynamic Asian Economies: key economic indicators (cid:9) 123
South and CentralAmerica
31. South and Central America: key economic indicators (cid:9) 125
ANNEX
Reference Statistics andAnnualProjections
Annex Table
Demand and Output
1. Real GDP (cid:9) A4
2. Nominal GDP (cid:9) A5
3. Real private consumption expenditure(cid:9) A6
4. Real public consumption expenditure (cid:9) A7
5. Real total gross fixed capital formation(cid:9) A8
6. Real gross private non-residential fixed capital formation (cid:9) A9
7. Real gross private residential fixed capital formation (cid:9) A10
8. Real total domestic demand (cid:9) All
9. Real exports ofgoods and services (cid:9) A12
10. Real imports of goods and services (cid:9) A13
Wages, Costs andInflation
11. Compensation per employee in the business sector (cid:9) A14
12. Unit labour costs in the business sector (cid:9) A15
13. GDP deflators (cid:9) A16
14. Private consumption deflators (cid:9) A17
15. Consumerprices (cid:9) Al8
16. Oil and other primary commodity markets (cid:9) A19
Labour Force, Employment and Unemployment
17. Labour force (cid:9) A20
18. Labour force participation rates (cid:9) A21
19. Employment (cid:9) A22
20. Unemployment rates: commonly used definitions (cid:9) A23
21. Standardised unemployment rates (cid:9) A24
22. Labour force, employment and unemployment(cid:9) A25
Business Sector
23. Capital income shares in the business sector (cid:9) A26
24. Rates ofreturn on capital in the business sector (cid:9) A27
Saving
25. Household saving rates: national definitions (cid:9) A28
26. Gross national saving as a percentage ofGDP(cid:9) A29
Fiscal Balances andPublic Indebtedness
27. General government total outlays (cid:9) A30
28. General government current receipts (cid:9) A31
29. General government financial balances (cid:9) A32
30. General government structural balances (cid:9) A33
31. General government primary balances (cid:9) A34
32. General government net debt interest payments (cid:9) A35
33. General government gross financial liabilities (cid:9) A36
34. General government net financial liabilities (cid:9) A37
Interest Rates and Exchange Rales
35. Short- and long-term interest rates (cid:9) A38
36. Nominal exchange rates (vis-à-vis the US dollar) (cid:9) A39
37. Effective exchange rates (cid:9) A40
External Trade andPayments
38. Export volumes (cid:9) A41
39. Import volumes (cid:9) A42
40. Export prices (average unit values) (cid:9) A43
41. Import prices (average unit values) (cid:9) A44
42. Competitive positions: relative unit labour costs (cid:9) A45
43. Competitive positions: relative export prices (cid:9) A46
44. Export performance for total goods (cid:9) A47
45. Shares in world trade (cid:9) A48
46. Trade balances (cid:9) A49
47. Non-factor services, net (cid:9) A50
48. Investment income, net (cid:9) A51
49. Current balances (cid:9) A52
50. Current balances as a percentage ofGDP (cid:9) A53
51. Structure ofcurrent account balances ofmajor world regions (cid:9) A54
52. Stocks offoreign assets and liabilities (cid:9) A55
Other BackgroundData
Annex Table
53. Semiannual demand and output projections (cid:9) A56
54. Semiannual price, cost and unemployment projections (cid:9) A58
55. Contributions to changes in real GDP in major OECD countries (cid:9) A60
56. Contributions to changes in real GDP in other OECD countries (cid:9) A61
57. Household saving, net wealth and indebtedness (cid:9) A63
58. Productivity in the business sector (cid:9) A64
59. Central government financial balances (cid:9) A64
60. Maastricht definition general government gross public debt(cid:9) A65
61. Monetary and credit aggregates: recent trends and targets (cid:9) A65
62. Export market growth and performance in manufactured goods (cid:9) A68
63. Geographical structure ofOECD trade (cid:9) A69
Annex Figure
1. Capacity utilisation in manufacturing (cid:9) A59
2. Real commodity prices (cid:9) A59
3. Stock prices and long-term interest rates (cid:9) A62
4. Measures ofrelative competitive position (cid:9) A66
LIST OF OTHER TABLES AND FIGURES
INTRODUCTION
Table
Summary ofprojections
OECD ECONOMIC OUTLOOK AND POLICIES
Box Tables
Consumption ofoil and selected non-oil primary commodities (cid:9) 6
The importance ofinventory building: the current upswing compared with
previous business cycles in major OECD countries (cid:9) 12
DEVELOPMENTS IN INDIVIDUAL OECD COUNTRIES
Standard Tables in the CountryNotes
Major OECD Countries
Demand and output
Employment, income and inflation
Financial indicators
External indicators
Other OECD countries
Demand, output and prices
Supplementaiy Tables in the CountryNotes
United States
Recent projections for the federal budget deficit (cid:9) 55
Germany
Public sector financial balances (cid:9) 65
Projections for western and eastern Germany(cid:9) 67
StandardFigures in the Countiy Notes
Major OECD Countries
Selected recent indicators
ANNEX
Table
GDP weights used in calculating aggregate measures (cid:9) A2
CONVENTIONAL SIGNS
S US dollar Decimal point
c US cent I, II Calendar half-years
£ Pound sterling Ql, Q4 Calendar quarters
mbd Million barrels per day Billion Thousand million
Data not available Trillion Thousand billion
0 Nil or negligible s.a.a.r. Seasonally adjusted at annual rates
Irrelevant n.s.a. Not seasonally adjusted