OECD Economic Surveys : Spain 1964.

50 Pages·2.841 MB·English

by  OECD

SPAIN
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SPAIN
BASIC STATISTICS
THE LAND
Area (1,033 sq. km) (cid:9) 504.7 Major cities (I960 census, thousands cf
Agricultural area (1.000 sq. km.). 208.3 inhabitants) :
Madtid (cid:9) 2,263
Bcrcelcna (cid:9) 1.553
Valencia(cid:9) SOS
Stvilla(cid:9) -<42
THE PEOPLE
Population (I960 census; thousands) . . 30.903 Total labour force (I960 census; thou¬
Number ofinhabitants persq. km (I960). 61 sands) : I1.634
Net natural increase (average 1958-1962; in agriculture (cid:9) 4.803
thousands) (cid:9) in industry (cid:9) 2,749
Net rate of increase per 1,000 inhabitart; in construction (cid:9) 822
(average 1958-1962) (cid:9) 12.8 in services (cid:9) 3,260
PRODUCTION
Gross national product 1962 (million Gross domsstic product at factor ces* by
pesetas) . (cid:9) 795.556 origin in 1962(percentages):
G.N.P. per head, 1962 (U.S.*). .... 430 Agriculture (cid:9) 24
Industry and construction. (cid:9) 32
Other (cid:9) (cid:9) - -44
THE GOVERNMENT
Public consumption in 1962 (percentage of Current government revenues in 1562 (per¬
G.N.P.)(cid:9) 8 centage of G.N.P.)(cid:9) 12
Public investment in 1962 (percentage of Internal public debt (percentage cf central
total investmsnt) (cid:9) 12 Government current revenue)(cid:9) 98
LIVING STANDARDS
Electricity consumption (kWh psr head) in Number of radio sets per I.CC0 inhcbitar.ts
1963(cid:9) 788 in I960 (cid:9) 88
Illiteracy rate in 1960(p^rcenrage-ofpeople Number of private cars per I.0C0 inhabitants
aged above 10). (cid:9) 13 in 1962 (cid:9) M
Calories per head, per day (1961-1962). . 2.790 Number of telephones per I.0C0 inhabitants
Annual meat consumption (kg. per head, in 1963(cid:9) 72
1961-1962) (cid:9) 20.8
FOREIGN TRADE
Exportsofgoods and services as a percentcg; Imports ofgoods and services esapercentage
of G.N.P. (1962)(cid:9) 12 ofG.N.P. (1962)(cid:9) 13
Exports in 1963 (percentage oftotal exports): Imports in 1963 (percentage oftotal imports):
Foodstuffs (cid:9) 45 Foodstuffs (cid:9) 18
Raw materials (cid:9) 22 Raw materials(cid:9) 29
Manufactured products (cid:9) 33 Manufactured products(cid:9) 53
THE CURRENCY
Monetary unit: peseta. Currency units per U.S.S.
ECONOMIC SURVEYS BY THE OECD
SPAIN
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The Organisation for Economic Co-operation and Development
wasset up undera Conventionsignedin Parison14thDecember 1960
by the Member countries ofthe Organisationfor EuropeanEconomic
Co-operation andby Canada andthe UnitedStates. This Convention
provides that the O.E.C.D. shallpromotepolicies designed:
toachievethehighestsustainableeconomicgrowthandemploy¬
ment and a rising standard of living in Member countries,
while maintainingfinancialstability, andthus 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;
tocontribute to theexpansionofworldtrade on amultilateral,
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, France, the FederalRepublic ofGermany, Greece, Iceland, Ire¬
land, 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 July 1964.
CONTENTS
A. Output and Demand (cid:9) 5
Total output and demand factors (cid:9) 5
Agriculture (cid:9) 6
Industry (cid:9) 7
Construction (cid:9) 10
Employment (cid:9) 11
B. The Internal Financial Situation (cid:9) 11
Prices (cid:9) 11
Wages(cid:9) 13
Money and Credit(cid:9) 14
Public Finance (cid:9) 18
C. External Transactions (cid:9) 23
Balance of Payments (cid:9) 23
Foreign Trade (cid:9) 24
Invisibles and Private Transfers(cid:9) 28
Capital Movements (cid:9) 28
D. The Development Plan 1964-67 (cid:9) 29
Overall targets (cid:9) 30
Guide-lines of development policy (cid:9) 30
Fiscal Policy(cid:9) 31
Banking and Credit (cid:9) 32
Agriculture (cid:9) 32
Industry and Transport (cid:9) 32
Programme of Public Investment (cid:9) 34
E. Conclusions (cid:9) 35
*
Statistical Annex (cid:9) 39
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SPAIN
1. In 1963, the national product increased appreciably, with all
the main factors of domestic demand expanding. The pronounced
price rises of the 1962-63 winter gave way to more limited ones,
restrained by plentiful harvests and a rapid growth of imports. A
marked recovery ofexports after the summer of 1963 was not sufficient
to prevent a sharp increase in the trade deficit. But booming receipts
from tourism, considerable amounts of workers' remittances and an
increased inflow ofcapital resulted in a further rise offoreign reserves,
which stood, in May 1964, at $ 1.1 billion.
2. Information available for the early months of 1964 suggests a
continuation of last year's trends; although there are risks of im¬
balances in particular sectors, there generally seems to be sufficient
margin to allow the authorities to continue their policy ofencouraging
productive investment. And the present situation would seem favour¬
able for the adoption ofmeasures and reforms aimed at solving Spain's
longer term problems. The Development Plan for 1964-67, which
was approved last December, could make an important contribution
in this sense.
A. OUTPUT AND DEMAND
Total output and demand factors
3. According to preliminary official estimates, the net domestic
product increased last year by nearly 11 per cent at current prices and
7 per cent in real terms. For a large part, Spanish economic statistics
do not allow quantitative descriptions of total output and demand to
be made with great confidence. But the rate of growth was certainly
high, with good harvests, most branches of industry continuing to
show significant advances, construction booming and the service sector
probably expanding considerably.
4. On the demand side, consumers' expenditure was boosted in
1963 by higher agricultural incomes, increased non-farm employment
and wages, and by rising workers' remittances from abroad; govern¬
ment expenditure rose appreciably; and both house-building and other
private investment expanded substantially (as evidenced by the sharp
increase ofcapitalgoodsimports and bankcreditsto theprivate sector).
Foreign demand for services continued to grow rapidly and commodity
exports after falling in the first part of 1963 showed a marked
recovery since the summer. There have been certain indications, more
recently, that the trend of private productive investment might be
flattening out, with a slowing-down of bank credit and an increase in
the liquid position of the banking system; however, imports of equip¬
ment goods remained very high in the first months of 1964, and the
business surveys which have recently been started point to a continued
expansion.
Agriculture
5. Since the summer of 1963, most harvests including the tra¬
ditional export products have been quite satisfactory1. Meat pro¬
duction has also increased. For the year as a whole, the rise in
the index of agricultural output (products for human consumption
only) is provisionally estimated at 13 per cent and the increase in
average prices received by farmers at about 4 per cent. The shortages
and high prices prevailing during the winter of 1962-63 led to increased
imports of essential foodstuffs mainly by the State Procurement
Agency which continued until the early months of 1964. These
helped to keep food prices down but the very fact that in many
cases they have reduced prices received by farmers below their previous
peak levels has caused certain difficulties. Policy has, therefore, moved
progressively towards regulating both the quantities and the prices of
imported foodstuffs through the mechanism of special import levies,
the proceeds of which will be used either for offsetting possible losses
of the Procurement Agency or for financing support prices of local
agricultural products.
6. It is, clearly, important to even out excessive fluctuations of
producers' and consumers' prices. This should be possible through
certain price support measures and through a more flexible use of
regulatory food imports and stock-building operations; in this connec¬
tion, the respective rôles of the State Procurement Agency (which at
present seems to deal with too wide a range of products) and private
trade could usefully be re-examined. A more fundamental problem,
however, concerns the extent to which agriculture should be supported
through the maintenance ofhighprices ratherthan measuresto increase
productivity. Ifpolicy wereto move too farin the former direction2, it
would risk adding to the pressures on consumers' food prices and
consequently on wages. It is essential to apply the greatest possible
effort to raise agricultural yields and re-shape the pattern ofproduction
to fit the new patterns of demand. And also to undertake overdue
1. For production figures, see Table I of the Statistical Annex.
2. e.g.therecentdecisiontostopimportsoffrozenmeat,althoughcorrespond¬
ing categories of domestic production seem in no way excessive.
improvements in the systems of distribution and marketing of agri¬
cultural products. The movement ofman-power away from the farms
is gradually changing the economic basis of a large part of Spanish
agriculture. The economic operations ofthe big agricultural holdings1
had been based on very cheap labour, on virtual immunity from taxa¬
tion(seepara. 28 below) and, inthecase ofwheatatleast, onfavourable
price support policies. The substantial increase of agricultural credit
in 1963 may reflect a trend towards increased investment by big and
medium holdings; on the other hand, purchases of tractors and agri¬
cultural machinery showed no real increases in 1963, according to
estimates by the Ministry of Agriculture. The simultaneous problem
ofvery small holdings can certainly not be solved by emigration alone2.
Industry
7. As shown in Table 1, the index ofindustrial production rose by
about 8 per cent in 1963. This new provisional index is based on 1958
and adjusted to take account ofnew firms; it does not, however, cover
certain branches and may under-estimate the growth of total output.
As in 1962, machinery and appliances, chemicals, means of transport
and construction materials were among the sectors which showed the
highest rate of growth. Production of textiles stagnated and mining
wasdepressed. Therate ofoutputofiron andsteelhas recentlyrecover¬
ed helped, no doubt, by a change oftrend in foreign markets and the
special protective duties introduced early in 1963.
8. There is good evidence that investmentin industry has continued
high, although it is difficult to make quantitative estimates. The pro¬
gress of a number of State-supported modernisation schemes (e.g. in
textiles) seems, however, to have been rather slow. In December 1963
fiscal exemptions and preferential credit facilities were introduced to
encourage the grouping of small enterprises, but it is too early yet to
see concrete results.
9. Last year's O.E.C.D. Survey on Spain outlined certain measures
which set minimum capacity requirements for the establishment of
new production units in industry3 and expressed some apprehension
about their economic effects. During the first year's implementation
ofthese measures, it seems that in some sectors ofindustry practically
all projects for new firms were authorised, even though they did not
conform to the minimum capacity requirements. In other sectors the
line taken by the authorities was less liberal. On the other hand, both
1. The first agricultural census has now provided official figures on their
importance. See Table II in the Statistical Annex.
2. Fora detailedillustration ofthisproblem, see O.E.C.D.: " LowIncomes
in Agriculture", 1964, Chapter on Spain.
3. This new method of control was established early in 1963; it replaced
thepreviousmethodofsubjectingtopriorapprovalindustrialinvestmentexceeding
in value 30 million pesetas.
Table 1. INDUSTRIAL PRODUCTION INDICES
Monthlyaverage 1960 = 100.
1963 19641 CHANGE
CHANGE JAN.-APRI1.
1961 1962 1963 1962-1963 1963-1964
PER CENT JANUARY-APRIL PER CENT
1. Food, drinkandtobacco (cid:9) 0.16 106.0 116.9 120.5 3.1 118.0 120.6 2.2
2. Textiles (cid:9) 0.16 109.7 114.7 115.2 0.4 118.3 115.1 - 2.7
3. Basicmetals (cid:9) 0.06 134.3 136.0 144.6 6.2 145.1 174.6 20.3
4. Engineeringand transportequipment 0.18 149.6 162.6 183.2 12.7 159.7 204.3 27.9
5. Chemicalsandpetroleumproducts... 0.10 112.0 128.6 143.2 11.4 152.0 167.6 10.3
6. Othermanufacturingindustries (cid:9) 0.20 113.1 130.1 145.6 11.9 139.3 166.9 19.8
7. Totalmanufacturing (cid:9) 0.86 119.5 131.3 142.3 8.4 137.4 156.4 13.8
8. Mining (cid:9) 0.08 103.6 98.5 97.5 1.0 101.9 99.5 - 2.4
9. Electricityand gas (cid:9) 0.06 109.8 120.7 132.6 9.9 148.0 163.0 10.1
10. GeneralIndex (cid:9) 1.00 117.6 128.2 138.3 7.9 135.5 152.7 12.7
1. Provisional figures.
Source: "Indicadores Economicos' ofthe National Institute ofStatistics.