OECD Economic Surveys : Luxembourg 1967.

21 Pages·0.889 MB·English

by  OECD

BASIC STATISTICS BELGIUM
THE LAND
Area (1,000 sq.km) (cid:9) 30.5 Main urban areas (1965) inhabi-
Agricultural area (1,000 sq.km) 15.9 bitants:
Brussels (cid:9) 1,065,900
Antwerp(cid:9) 666,700
Liege (cid:9) 452,700
THE PEOPLE
Population (1966) (cid:9) 9,528.000 Net immigration (1966)(cid:9) 21,067
Number of inhabitants per sq.km Total labour force (1966) (cid:9) 3,838,000
(1966)(cid:9) 312 Wage and salary earners in agri¬
Population, net natural increase: culture (1966)(cid:9) 15,500
Yearly average (1964-66)(cid:9) 42,486 Wage and salary earners in manu¬
Yearly rate per 1,000 inhabitants facturing industries (1966)(cid:9) 1,084,000
(1966)(cid:9) 3.78
PRODUCTION
Grossnationalproduct(1966),billions Nationalexpenditure(1966)billionsof
of Belgian francs(cid:9) 900.9 Belgian francs:
Gross national product per head Private consumption(cid:9) 588.5
(1966) USS (cid:9) 1.891 Public consumption (cid:9) 121.0
Gross fixed investment: Gross fixed asset formation (cid:9) 194.1
Percentage of GNP (1966) (cid:9) 21.3 Net exports(cid:9) 10.1
Per head (1966) USS (cid:9) 408
THE GOVERNMENT
Current government expenditure on Composition ofthe House ofReprésenta¬
goods and services (1966): tives: %
Percentage of GNP(cid:9) 13.4 Christian-Social Party(cid:9) 36
Current government revenues (1966), Socialist Party (cid:9) 30
% ofGNP(cid:9) 31.7 Liberal Party (cid:9) 23
Central Government debt, 31-12-1966, Communist Party (cid:9) 3
Billions of Belgian francs(cid:9) 472.5 Others (cid:9) 8
Last election: 1965.
Next election: 1969.
LIVING STANDARDS
Calorics per head, per day (BLEU) Number ofprivate cars per 1,000inhabi¬
1964-65 (cid:9) 3,150 tants (1966)(cid:9) 140
Consumption of electricity per head Number of telephones per 1,000 inhabi¬
1966 (kWh) (cid:9) 2,243 tants (1966)(cid:9) 155
Number ofTVsets per 1,000inhabitants
(1966)(cid:9) 163
FOREIGN TRADE
Exports: Imports:
Main exports in 1966 (% oftotal exports) Main imports in 1966(percentage oftotal
(BLEU): imports) (BLEU):
Base metals(cid:9) 24 Machinery and equipment............ 15
Mach'nïry and Equipment ........... 10 Minerals(cid:9)(cid:9) 11
Textiles(cid:9) 9 Base metals(cid:9) 11
Transport Equipment (cid:9) 9 Textiles(cid:9) 5
THE CURRENCY
Monetary unit: Belgian franc. Currency units per US dollar: 50.
BASIC STATISTICS LUXEMBOURG
THE LAND
Area (sq.km)(cid:9) 2,586 Major city:
Agricultural area (1966, sq.km) (cid:9) 1,349 Luxembourg (1966) inhab. 76,500
Woodland (1963, sq.km) (cid:9) 840
THE PEOPLE
Population (1966)(cid:9) 332,700
Number of inhabitants per sq.km Total labour force (1966)(cid:9) 140,000
(1966) (cid:9) 129 Wage and salary workers in agricul¬
Population, net natural increase ture (1965)(cid:9) 1,000
(1958-64): Wageandsalary workers inindustry
Yearly average (cid:9) 1,300 (1965) (cid:9) 58,000
Per 1,000 inbabitanti(cid:9) 4.0
Net immigration (average 1958-63). 2,641
PRODUCTION
Grossnationalproduct(1964),millions Grossnationalproductatfactorcostby
ofLux, francs(cid:9) 31,596 origin (1964):
Grossnationalproductperhead,USS 1,900 Agriculture(cid:9) 6.3
Gross fixed investment(average 1962- Mining and quarrying(cid:9) 2.0
64): Manufacturing(cid:9) 40.9
Percentage ofGNP(cid:9) 32.1 Construction (cid:9) 8.8
Per head, USJ(cid:9) 696 Other(cid:9) 42.0
THE GO
Public consumption (1964), percentage Composition ofthe Chamber: %
ofGNP (cid:9) 11.1 Christian Social Party (cid:9) 39
Currentgovernmentrevenue (1964) per¬ Workers Socialist Party(cid:9) 38
centage ofGNP(cid:9) 33.7 Democratic Party (cid:9) 11
Central Government debt. Decem¬ Communist Party (cid:9) 9
ber 31st, 1966 (Billion Lux. Fis).... 10.7 Others (cid:9) 3
Last election: 1964.
Next election: 1969.
LIVING STANDARDS
Grotsavengehourly««rnlng»(1965),Lux. Number oftelephones per 1,000 inhabi¬
francs(cid:9) 61 tants (1966)(cid:9) 224
Numberofprivatecarsper1,000inhabi¬ NumberofTVsetsper 1,000inhabitants
tants (1966)(cid:9) 187 (1966)(cid:9) 93
THE CURRENCY
Monetary unit: Luxembourg franc. CurrencyunitsperUSdollar: 50.
ECONOMIC SURVEYS BY THE OECD
Archives -
Références
- DOC PRÊTÉ -
RETOUR BUREAU 706
BELGIUM-LUXEMBOURG
ECONOMIC UNION
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The Organisationfor Economic Co-operation andDevel¬
opment was set up under a Convention signed in Paris on
14th December 1960 by the Member countries ofthe Organ¬
isationfor 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 maintainingfinancial stabi¬
lity, and thus to contribute to the development ofthe
world economy;
to contribute tosoundeconomicexpansion 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 legalpersonalitypossessed by the Organisationfor
European Economic Co-operation continues in the OECD,
which came into being on 30th September 1961.
The members ofOECD are: Austria, Belgium, Canada,
Denmark, France, the FederalRepublic ofGermany, Greece,
Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States.
This document was approved
by the Economic and Development Review Committee
in November 1967.
CONTENTS
Introduction (cid:9)
I The Belgian economy in 1966-1967 6
Demand factors (cid:9) 6
Output (cid:9) 11
Employment and unemployment .. 11
Prices and incomes (cid:9) 14
II Economic policy in 1966 and 1967 16
Publicfinance (cid:9) 17
Recent economic policy measures.. 18
The problem ofthe Belgian publicfinances 20
in Prospects (cid:9) 26
IV The Luxembourg economy in 1966-1967 28
V Conclusions (cid:9) 30
Statistical annex 34
If world trade trends begin to improve towards the end of 1967, the
demand forexports shouldprovide a stimulus to the Belgian economy. An
improvement might thus begin to show itself towards the end of 1967 or
early in 1968. It is however doubtful whether, in the absence ofa definite
recovery in domestic demand, and specially in private investment, such
an improvement would in itself suffice to bring the Belgian economy
anywhere near the full employment level.
IV. THE LUXEMBOURG ECONOMY IN 1966-67
In 1966 the expansion in overall demand was very weakfor the second
year running. According to provisional estimates the growth in real
terms ofthegross national productwas ofthe orderof2percentas against
1.5 per cent in 1965 and 6.5 per cent in 1964. The poor growth record
is due to the falling offofforeign demand and thefurther declinein invest¬
ment by 6.5 per cent after a decline of 18 per cent in 1965. The rate of
increase of consumption demand, private and public, has remained about
3 per cent (in volume). The index ofindustrial production, which largely
reflects trends in iron and steel production, declined by 3.6 per cent in
terms of annual averages. The new enterprises set up in recent years in
other sectors ofproduction are not yettaken into account in the industrial
production index, but to judge by employment trends their development
has been similar to that of the rest of industry. Employment has gone
down slightly (1.1 per cent), the decline being more pronounced in the
last quarter of the year, mainly because of reduced activity in construc¬
tion. Nevertheless, the number of foreign workers has increased some¬
what (1.4 per cent). The upward movement in consumer prices has
definitely slowed down. The increase was 1.6 per cent from December
1965 to December 1966, as against 4.4 per cent during the previous
twelve months, which ware affected by the abolition of certain subsidies
to agricultural products of mass consumption.
For the current year an increase in the gross national product of
about the same order asin 1966is foreseen (2 to 2.5percentin real terms).
Gross fixed asset formation will probably be somewhat lower (2 to 3 per
cent) from the reduced level recorded for last year, whilst expenditure on
consumption should grow more slowly (2 to 2.5 per cent). On the other
hand, the foreign trade position should improve somewhat.
In view of the trends during the first half of the year, it is uncertain
whether these forecasts will be realised. After moving up during the first
quarter, the index ofindustrial production (seasonally adjusted) has fallen
back significantly. Its level for thefirsthalfof 1967was hardly any higher
than in the corresponding period of 1966. The employment situation has
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Table 8. GRAND DUCHY OF LUXEMBOURG : MAIN ECONOMIC INDICATORS
UNIT 1965 1966 1967
OR 1964 1965 1966
BASE II m IV I II m IV I II
Industrialproductionindices1:
Generalindex (cid:9) 1947=100 223 225 216 233 218 224 215 224 211 215 217 224
Generalindexwithoutironandsteel .. » 176 176 174 185 175 174 167 185 175 167 163 181
Ironandsteelindex (cid:9) » 251 253 241 261 243 252 243 246 232 243 249 149
Indexforbuilding(cid:9) 1956=100 97 96 93 118 113 85 71 112 107 80 58 86
Employment*:
to Workersemployedinindustry (cid:9) Thous. 47.3 49.0 48.5 49.8 50.2 47.2 49.7 49.6 48.9 45.7 46.2 46.3
so Foreignworkersemployedinindustry » 15.3 17.5 17.8 18.3 18.4 15.9 18.3 18.8 18.4 15.6 16.2 16.5
Workersemployedinironandsteel ... » 22.2 22.4 22.3 22.3 22.4 22.5 22.4 22.3 22.2 222 22.0 21.8
Workersemployedinotherindustries . » 23.4 25.0 24.5 25.9 26.1 23.1 25.9 25.8 25.1 2Z1 22.8 23.1
Registeredunemployed9 (cid:9) Units 45 46 22 2 18 50 23 6 13 45 140 109
Unfilledvacancies* (cid:9) » 800 686 505 831 744 550 642 552 525 301 385 381
Prices:
Costoflivingindex (cid:9) 1960=«100 107.5 111.1 114.0 110.5 112.0 112.6 113.0 113.2 114.7 115.1 115.0 115.2
1. Not seasonally adjusted.
2. On the first day orthe last month ofeach quarter.
3. As at end ofmonth.
Source: STATEC Bulletin.
deteriorated steadily since the beginning of the year. The numbers em¬
ployed inindustryfell by 7 percentinthefirsthalfoftheyear. Registered
unemployed increased, whilst vacancies fell markedly. Recent business
surveys show that the level of orders in the iron and steel industry has
improved somewhat after the sharp decline recorded at the end of 1966.
The public finances should have a more expansionary effect than in 1966.
According to the initial forecasts public expenditure should increase by
14 per cent and revenue by about 11 per cent. The deficit for the year
should thus be L. Fr. 374.1 million, as against 76.4 million in 1966, and
a surplus of 119.5 million in 1965. However, the Government decided
atthe beginningoftheyeartofreeze2percent ofordinaryexpenditureand
4.5 per cent of extraordinary expenditure in order to reduce the overall
deficitandtofinanceincreasedtransfers(higherfamilyallowances,pensions,
transfers to local authorities). The enabling act regulating productive
investment, which hadexpired attheendofthepreviousyear,willprobably
be re-enacted.
The present condition of the economy, particularly the persisting
weakness of investment and the outlook for iron and steel production,
clearly indicate that public investment should be stepped up, even at the
cost of a temporary widening of the budget deficit, whilst the effort to
diversify production should not be relaxed.
V. CONCLUSIONS
Helped by favourable world trade conditions, the Belgian economy
was able to achieve a very satisfactory rate ofgrowth from 1960 to 1964.
The gross national product grew in volume by 5.4 per cent per year on
average, andinvestmentinmachineryandequipmentby6.7percent. Cur¬
rent saving by General Government increased considerably, and the level
of foreign exchange reserves rose. In mid-1964 the authorities, worried
by the emergence ofsome pressure on prices and wages, adopted a policy
ofrestraint. Itis difficultto sayhowfaritwasthispolicywhich provoked
the slowing down of growth, and how far autonomous factors were also
involved. It is nevertheless a fact that in 1965, in spite of continuingly
favourable world trade conditions and a substantial improvement in the
foreign payments balance, the growth in volume of the gross national
product fell to 3.5 per cent, whilst the upward movement in prices acceler¬
ated and, withtheslowdownin the growth ofpublicrevenuetheborrowing
requirements of General Government increased.
In 1966 the slackening of external demand added to the difficulties
of the Belgian economy. In spite of the maintenance of a satisfactory
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levelofinvestment probablyconnectedwithinvestmentbyforeignfirms
production declined after the first quarter. Private consumer demand
weakened still further owing to the deterioration in the employment situa¬
tion and the slowdown in wage increases. .The stimulus which the sub¬
stantial increase in public expenditure could have exerted was in part
neutralised by increases in taxation. The slowdown in growth was even
more marked in 1967, in spite ofan improvement in the external balance.
The growth of unemployment, still marginal in 1965 and 1966, suddenly
acceleratedfromthebeginningoftheyearonwards, andisboundto depress
private consumer demand. Private investment will probably decline
compared to 1966. The growth in public expenditure will be markedly
smaller, but the deficit of the public sector should increase considerably.
Unlessworld tradeconditions recover much more strongly than now seems
likely, the improvement to be hoped for from that quarter for the Belgian
economy will remain limited, and 1968 may well be the fourth consecutive
year in which growth falls short of the economy's potential performance.
In these conditions a determined policy ofexpansion seems necessary.
No real obstacle stands in its way. The margins of unused productive
capacity, both material and human, are large. Prices and wages are rising
much more slowly. The balance of payments is in surplus once more,
and foreign exchange reserves stand at a relatively high level. The only
problemwhich arisesis thechoice ofinstrumentsfor apolicy ofexpansion.
It does not seem as ifmonetarypolicy can do much more to stimulate
demand. No doubt more could be done actively to encourage the easing
in effective rates of interest. Credit restrictions have been abandoned.
Butitisunlikelythatsuch measurescouldhavemorethanamarginaleffect.
Official budget policy in 1967 will certainly have a stimulating effect
ontheeconomy,sincetotalbudgetexpenditure(ordinaryandextraordinary)
will expand considerably faster than the value of the national product,
and the overall deficit will be higher than in 1966. Official economic
policy is directed essentially towards stimulating the growth of private
investment, and stepping up public investment. With regard to private
investment, measures taken under the special powers are intended both
to bring about an increase in overall volume and to promote regional
and sectoial restructuration. One may hope that these measures will
produce significant results in the near future. It may well be however,
thatwiththesluggishnessofinternaldemandandofworldtrade,conditions,
the response ofprivate investment to measures of stimulation will remain
limited. If such is the case, public investment on an increased scale and
accordingto anacceleratedtimetablewouldinprinciplebethemostappro¬
priate means of stimulating demand whilst at the same time improving
thecountry's productivepotential. Itmight nevertheless prove technically
difficult at short notice further to increase by a substantial amount the
volume ofpublic works. Ifthat were so, and ifthe worsening ofgeneral
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