OECD Economic Surveys : Austria 1964.

39 Pages·2.416 MB·English

by  OECD

AUSTRIA
AUSTRIA
BASIC STATISTICS
THE LAND
Area(thousand km1) (cid:9) , . . 84 Majorcities,March 1961 (thousandsofin-
Agriculturalarea(Thousandkm1). . . -41 habitants):
Exploitedforestarea(thousand km1). 32 Vienna (cid:9) 1,627
Graz (cid:9) 237
Linz (cid:9) . 196
Salzburg (cid:9) 108
Innsbruck (cid:9) 101
THE PEOPLE
Population,March 1961(cid:9) . 7,073,807 Net emmigration, annual average
perkm1 ........... 84 1959-61. (cid:9) 1,961
Net natural increase in population, Totalemployment(l),monthlyaverage
annual average 1959-61. .... 39,546 1963 (cid:9) 2,342,103
per 1,000inhabitants. ..... 5.6 inindustry (cid:9) 607,100
PRODUCTION
Grossnationalproduct, 1963(sch.billion). 199 Industrial origin ofG.N.P. at market prices,
perhead (U.S. S). (cid:9) 1,080 1963(percent):
Grossfixed investment,average 1961-63: Agriculture (cid:9) 10
percentofG.N.P,. (cid:9) 22 Industry . (cid:9) 38
per head (U.S. S). ........ 234 Construction (cid:9) . 9
Services (cid:9) 43
Home food production, average 1960-62
(per cent oftotal food availability). ... 87
THE GOVERNMENT
Publicconsumption, 1963(percentofG.N.P,). 13 CompositionofFederalParliamentMay1964:
General Government current revenue, 1962 Austrian People's Party. (cid:9) 81
(percentofG.N.P.). (cid:9) 35 Socialist Party. (cid:9) 76
Federal Government Debt, 31st December Freedom Party. ............ 8
1963 (per cent of Federal Government Last election: 1962.
revenue) (cid:9) 45 Next election: 1965.
LIVING STANDARDS
Caloriesperhead,perday 1960-61. . , . 3,010 Number of passenger cars in use, October
Weekly gross earnings of industrial I962(per 1,000inhabitants)(cid:9) 77
workersinVienna, 1963(sch.). .... 617 Numberoftelephones, December 1961 (per
1,000 inhabitants)(cid:9) 106
Number of radiosets, December 1961 (per
1,000 inhabitants). .......... 290
Number of television sets, December 1961
(per 1,000inhabitants). (cid:9) 4!
FOREIGN TRADE
EXPORTS: IMPORTS:
Exports of goods, and services 1961-63 (per Imports of goods and services, 1961-63 (per
cent of G.N.P.) (cid:9) 25 centofG.N.P.)average(cid:9) 25
Exports, 1963 (per cent oftotal marchandise Imports, 1963 (per cent oftotal merchandise
exports): imports):
. Food,tobacco,beverages. ...... 5 Food,tobacco,beverages(cid:9) 13
Rawmaterialsand energy ...... 17 Rawmaterialsandenergy (cid:9) 21
Chemicals (cid:9) 20 Chemicals (cid:9) 8
Other finished and semi-manufactured Machinery and transportequipment. . 30
products (cid:9) 54 Other finished and semi-manufactured
products (cid:9) 28
THE CURRENCY
Monetary unit: Schilling. Currency units per U. S. dollar: 26.
(1) Wage and salary earners.
ECONOMIC SURVEYS BY THE OECD
AUSTRIA
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The Organisation for Economic Co-operation and Development
wasset up under a Convention signedin Paris on 14th December I960
by the Member countries ofthe Organisation for EuropeanEconomic
Co-operation andby Canada andthe UnitedStates. This Convention
provides that the O.E.C.D. shall promote policies designed:
toachievethehighestsustainableeconomicgrowth andemploy¬
ment and a rising standard of living in Member countries,
while maintainingfinancial stability, and thus to contribute to
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 ofworldtrade on a multilateral,
non-discriminatory basis in accordance with international
obligations.
The legalpersonalitypossessedby the Organisationfor European
Economic Co-operation continues in the O.E.C.D. which came into
being on 30th September 1961.
The members of O.E.C.D. are Austria, Belgium, Canada, Den¬
mark, Fiance, the Federal Republic ofGermany, Greece, Iceland, Ire¬
land, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, Turkey, the United Kingdom and the
United Stales.
This document was approved
by the Economic and Development Review Committee
in May 1964.
CONTENTS
I. THE GROWTH OF ECONOMIC ACTIVITY
o
Demand (cid:9)
5
Output (cid:9)
8
II. THE RISE OF PRICES AND WAGES
9
III. FOREIGN TRADE AND PAYMENTS
11
IV. ECONOMIC POLICY (cid:9)
15
The Federal Budget
-, (cid:9) 1C
Money and Capital Markets (cid:9) ' ^
The Stabilisation Problem (cid:9) 7q
V. THE CAPITAL MARKET PROBLEM
(cid:9) 20
VI. CONCLUSIONS (cid:9)
(cid:9) 28
STATISTICAL ANNEX (cid:9)
29
CD
CQ
AUSTRIA
1. 1964 promises to be a relatively good year for the Austrian
economy. Economic activity is likely to rise somewhat faster
than, last year. The disparities between the performance of
individual sectors of the economy may become less pronounced.
The rise in prices and wages should become more moderate
and the balance of payments is likely to remain strong. The
authorities expect no need to undertake major changes in the
area of short-term economic policy in 1964. In the long-term
field, by contrast, a number of important issues remain in the
fore, particularly those relating to the functioning of the capital
market. Sections I to IV of this report review current trends
in the economy and budgetary and monetary policies. Section V
discusses the capital market problem.
I. THE GROWTH OF ECONOMIC ACTIVITY
2. The real gross national product can be expected toincrease
by 5 per cent of"more from 1963 to 1964. Last year the ad¬
vance was 4.4 per cent; in 1962 it amounted to little more than
half that rate. Normal wheather conditions alone could be ex¬
pected to cause some acceleration of growth in the current
year, since the advance of activity in 1963 was adversely
affected by the severe winter early in the year. But it is first
and foremost themore vigorous trend of demand, notably export
demand, which asserted itself last autumn and has gathered
force since then, that points to a faster growth in 1964. The
relative contribution of individual demand components is likely
to change; that of public expenditure, stock building, and
possibly also private consumption, will become smaller; that
of business fixed investment (which fell last year) and exports
may well increase substantially.
Demand
3. In the second half of 1963 the volume of private consump¬
tion was 6 to 7 per cent larger than a year earlier. Data on
retail sales suggest that the growth of consumer spending
Table 1. GROSS NATIONAL PRODUCT AND EXPENDITURE
Percentage change in volume
from previous year
I960 1961 1962 1963
Private consumption . 6.4 4.9 5.2 5.1
Public consumption .. 1.1 1.1 2.2 5.5
Grossfixed assets for¬
mation (cid:9) 15.3 6.3 -2.0 1.5
Exports of goods and
services (cid:9) 11.2 5.4 9.0 8.9
Less: Imports of goods
and services (cid:9) 20.8 4.2 9.3 4.1
Gross national product 8.3 4.8 1.5 4.4
SOURCE: Monatsberichte desOsterreichischenInstitutesftirWirtschaftsforschung.
on durable goods, notably furniture and household equipment,
steepened towards the end of the year. Consumer demand for
motor vehicles, by contrast, lost some of its strength. The
rise of consumer spending on non-durable goods remained high.
4. In 1964, consumer incomes are unlikely to increase at a
higher rate than last autumn. Disposable non-wage incomes
will benefit from the cuts in personal income tax decided in
1962, but the growth of real wages and salaries may become
less steep. It cannot, therefore, be expected that the rise of
private consumption will further accelerate in the current year.
Indeed, there is reason to believe that the rise may be some¬
what less vigorous than in recent months.
5. Estimates are not as yet available to indicate the rôle
played by stock accumulation in speeding up the growth of over¬
all demand in 1963. But industrial enquiries and data relating
to imports, production and trade strongly suggest that the
earlier tendency torun down stocks ofraw materials and finish¬
ed goods was reversed in the spring of 1963, and that overall
demand may have benefited in an important measure from the
subsequent drive to replenish stocks at the various stages of
production. Although the process may not as yet have come to
an end, inventory demand is likely to be geared more to normal
current stocking needs in 1964 than it was last year.
6. The growth of private and public building and construction
demand will probably remain strong in 1964. The lower cost of
bank credit and other types of long-term finance, should, if
anything, act as a stimulus to local authority investment and
Table 2. PRIVATE CONSUMPTION
Percentage change in volume
from previous year
1963
1961 1962 1963 ^t 2nd 3rd 4th
quater quater quater quarter
Food (cid:9)(cid:9) 3.6 3.4 3.7 2.8 4.9 5.1 2.2
Tobacco (cid:9) 7.4 9.1 7.7 6.2 9.0 8.2 6.9
Clothing (cid:9) 7,9 7.3 2.8 2.3 3.4 2.0 3.1
Furniture and
household goods 7.8 1.2 7.1 0.7 4.2 8.6 11.0
Heating and
lighting (cid:9) 2.2 14.0 15.4 27.4 7.9 11.6 13.2
Education,
entertainment
and recreation . 5.0 8.7 12.2 2.1 12.2 11.1 22.3
Transportation . 3.8 8.8 7.5 7.2 9.7 6.8 6.6
Other goods and
services (cid:9) 4.5 3.6 2.9 1.8 5.0 0.3 4.3
Total private
consumption .. 4.9 5.2 5.1 4.1 5.6 5.6 5.2
SOURCE: Monatsberichte des OsterreichischenInstitutes ftir Wirtschaftsforschung.
certain types of private building. Dwelling construction, in
particular, is likely to expand steeply, partly as a result of
larger spending by public authorities and funds.
7. The last investment enquiry conducted in industry in the
autumn of 1963 pointed to a fall of business fixed investment in
the current year. * Were this to happen, it would mean athird
consecutive year of declining fixed asset formation in the
business sector. But entrepreneurial expectations have no
doubt improved in recent months. A revival of demand in this
area cannot as yet be statistically confirmed, but it may not be
altogether unrealistic to expect a substantial improvement of
the investment climate in the course of the current year.
Favourable demand prospects in both domestic and the main
foreign markets, and the outlook for relatively stable wage
developments augur well for business profits.
* 43per centofthefirms coveredplannedtoreduce capitaloutlays in 1964, 13per
centonly, expectedtospend more.
8. But it is unlikely that fixed asset formation in the business
sector will show any spectacular advance in 1964. Entrepre¬
neurs' investment decisions may continue to be adversely
affected by uncertainties as to Austria' s future position in
European integration arrangements. Furthermore, activity in
the basic (nationalised) industries, which in addition to a weak
conjuncture, face structural problems and E.E.C. tariff dis¬
crimination, will continue to depress the overall figures.*
Those industries have accounted for two-fifths of industrial
fixed capital formation in recent years. Even if capital out¬
lays in non-nationalised enterprises should expand by 5 percent
in 1964, the total of industrial fixed investment would show no
advance if the cuts originally planned in the nationalised sector
were to be made. The revival of the steel market in recent
months may, however, have brought an upward revision of
investment plans in the steel industry.
Output
9. Given reasonably normal weather conditions the Austrian
economy should be able to accommodate a growth of demand of
5 percent or more in 1964 without undue pressure onresources.
In the industrial sector there is scope for meeting a faster
expansion of demand, particularly if, as does not seem un¬
likely, demand becomes better adapted to capacity conditions
than in recent years. In 1963, activity in the capital goods
industries declined for the second consecutive year; it has
picked up in recent months. Although fixed asset formation in
those industries has also contracted in recent years, the scope
for raising output with existing capacity is fairly substantial.
In the consumer goods industries last year' s 7 per cent growth
of output represented a postwar record. Total industrial pro¬
duction has been rising at an annual rate of 4 to 5 percent since
the spring of 1963, despite declining employment.
10. Conditions also improved in other sectors of the economy
in 1963. Agriculture appears to have made good the setback of
the preceding year; with relatively stable agricultural prices,
gross proceeds are estimated to have been about 6 per cent
higher than in 1962. The outflow of labour from agriculture
continued at about the same rate as in recent years. After a
slight decline in 1962, output in the building industry rose by
about 4 per cent in 1963. The advance reflects chiefly pro¬
ductivity improvements. The labour market in the building
trades remained tight, although the release of workers from
the industrial sector may have helped to check pressures on
labour in the building as well as the service trades.
* Customs duties on iron and steel in E.C.S.C. countries were raised to the
ItalianlevelinJanuary. Thisimplied an increaseofGerman duties from4to9per centad
valorem. TheGerman market normally takessome 30percent ofAustria's iron andsteel
exports, correspondingto 15percentofironandsteelproduction.