OECD Economic Surveys : Sweden 1963.

45 Pages·2.359 MB·English

by  OECD

SWEDEN
BASIC STATISTICS
THE LAND
Area (1,000 sq. km.)(cid:9) -450 Major cities (Dec. 1962):
Lakes (1,000 sq. km.)(cid:9) 39 Stockholm (cid:9) 805.000
Arable area (1,000sq. km.)(cid:9) 36 Gothenburg (cid:9) 410,000
Woodland (1.000 sq. km.)(cid:9) 229 Malmo (cid:9) 240,000
THE PEOPLE
Population (Dec. 1962) . . . . 7.580.000 Net natural increase per 1,000 inhabitants
No. of inhabitants per sq. km.. 17 (average 1957-1961) 4.1
Netnatural increase(average 1957-1961) 31,000 Netannualimmigration(average 1957-1961) 11.000
PRODUCTION
Gross National Product in 1961 (millions of Gross fixed capital formation (1961):
Kronor)(cid:9) 69.270 percentage of GNP (cid:9) 22
GNP per head (U.S. S) ........ . 1.768 per head, U.S. S (cid:9) 392
THE GOVERNMENT
Public consumption in 1961 (percentage ofthe Composition ofParliament(No. ofSeats):
GNP). (cid:9) 18 1st 2nd
General government current revenue in 196] amber Chamber
(percentage ofthe GNP) (cid:9) 37
Public gross fixed capital formation in 1961 Social democrats(cid:9) 77 114
(percentage ofthe GNP)......... 4 Liberals (cid:9) 27 40
Public debt at end 1961 (ratio to general Conservatives ....... 26 39
government revenue in 1961)(cid:9) 136 Centre (cid:9) . . . . 19 34
Communists (cid:9) 2 5
232
Last general election: I960
Next general election: 1964
LIVING STANDARDS
Calories per head, per day (1960-1961). 2,940 Number of telephones per 1.000 inhabitants
Averagehourlyearningsofmaleindustrial (1961)(cid:9) 384
workers in 1962 (in Kronur)(cid:9) 6.62 Number of radio sets per 1,000 inhabitants
Number of passenger cars in use per (1961)(cid:9) 377
1.000 inhabitants (Dec. 1961)(cid:9) 173 NumberofT.V.setsper 1,000inhabitants(1962) 215
FOREIGN TRADE
Exports Imports
Exports of goods and services as a percentage Imports of goods and services as a percentage
of GNP (average 1957-1961)(cid:9) 28 of GNP (average 1957-1961)(cid:9) 28
Main exports (percentage of total commodity Main imports (percentage of tolal commodity
exports in 1961): imports in 1961):
Forestry products(cid:9) 31 Machinery,apparatusandtransportequipment 27
Machinery,apparatusandtransportequipment 32 Raw materials (non-edible) and fuels. ... 22
Iron and steel (cid:9) 8 Metals and metal products(cid:9) 13
Iron ore (cid:9) 8 Food, beverages and tobacco (cid:9) 12
THE CURRENCY
Monetary unit: Krona Currency units per U.S. ^: 5.17
ECONOMIC SURVEYS BY THE OECD
SWEDEN
1963
ORGANISATION FOR ECONOMIC
CO-OPERATION AND DEVELOPMENT
The Organisation for Economic Co-operation and Development was set up
undera Convention signedin Parison 14th December 1960by the Member countries
ofthe Organisation for European Economic Co-operation and by Canada and the
United States. This Conventionprovides that the O.E.C.D. shallpromote policies
designed:
to achieve the highest sustainable economic growth and employment and a
rising standard of living in Member countries, while maintaining financial
stability, and thus to contribute to the development ofthe world economy;
tocontributetosoundeconomicexpansioninMemberas wellasnon-member
countries in theprocess ofeconomic development;
to contribute to the expansion of world trade on a multilateral, non-dis¬
criminatory basis in accordance with international obligations.
The legal personality possessed by the Organisation for European Economic
Co-operation, continues in the O.E.C.D., which came into being on 30th September
1961.
The Members ofO.E.C.D. are: Austria, Belgium, Canada, Denmark, France,
the Federal Republic of Germany, Greece, Iceland, Ireland, Italy, Luxembourg,
theNetherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United
Kingdomandthe UnitedStates.
This document was approved
by the Economic and Development Review Committee
in April 1963
CONTENTS
I. ECONOMIC PLANNING (cid:9) 5
Long-term planning (cid:9) 5
The National Budget (cid:9) 11
II. ECONOMIC POLICY INSTRUMENTS (cid:9) 11
Budgetary Policy (cid:9) 11
Labour Market Policy (cid:9) 15
The New National Pension System (cid:9) 16
The Instruments of Credit Policy (cid:9) 17
Incomes Policy (cid:9) 17
HI. THE USE OF POLICY INSTRUMENTS (cid:9) 19
Measures to increase savings and investments (cid:9) 19
Stabilisation Policy (cid:9) 20
IV. CONCLUSIONS (cid:9) 24
STATISTICAL ANNEX (cid:9) 29
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ECONOMIC SURVEYS BY THE O.E.C.D.
SWEDEN
1. The present Survey considers Swedish policy-making in recent years.
Demand management, growth problems and incomes policy stand in the
forefront ofeconomic policydiscussion in mostMember countries'. Swedish
policy has been particularly active, notably in the field of demand
management, and has used a rather wider range of measures than most
other countries. Part I deals with economic planning and Part II reviews
the policy instruments applied, notably in stabilisation policy. Part III
considers the problems with which policy has been confronted over the
last full business cycle, and the ways in which they were tackled.
I. ECONOMIC PLANNING
2. In the post-war period, an integrated system of planning and fore¬
casting for the economy as a whole has become a permanent feature of
economic policy in Sweden. It is convenient to distinguish the long-term
operations, which generally cover the next four years or more, and the
so-called national budgets or economic surveys which the Government
presents to the Riksdag in connection with the fiscal budget at the
beginning of each year.
A. LONG-TERM PLANNING
The Nature of the Plan
3. There are wide differences between the interpretations which in¬
dividual countries place on the concept of long-term economic planning.
In Sweden, the long-term plan does not consist of aprogramme which the
Government puts forward and to which, subject to Parliamentary consent,
it commits itself. Rather it is an expert study put forward to the Govern¬
ment which may or may not endorse its contents. The report is generally
published.
4. Three such studies have been prepared since the pioneer effortwas
elaborated in 1947-1948 as part of the European Recovery Programme.
The latest is mainly concerned with the five years 1961-1965, but con¬
tains some discussion of the period beyond the middle sixties.
5. The 1961-1965 study consists of a set of estimates of the main
components of the national accounts which, in the opinion of the experts
responsible for the study, set a reasonably ambitious target for govern¬
ment policy to aim at. The forecasts are prepared on the basis of a) the
experts' estimates of the supply potential of the economy; b) what is
already known about the plans of private firms, local authorities and
particular government bodies ; c) how it is thought other types of demand
will develop.The need to reconcile the demand estimates with the supply
estimates provides the occasion for the policy recommendations to the
authorities. The purpose of the plan is not to fix rigid objectives with
detailed targets for each individual sector. Since Sweden is predomi¬
nantly a free market economy the object is rather to provide a longer-
term perspective as a basis for policy discussion, give advancewarning
of possible strains and stresses, and provide some sort of guidance to
those responsible for private and public investment planning. Given the
decentralised nature of economic management in Sweden, and the obvious
uncertainty of many of the assumption on which the forecasts are based
(e.g. international trade conditions) the study lays great stress on the
tentative nature of the estimates and on the need to retain flexibility in
decision-making at all levels. But in order, at the outset, to provide
a clear target for government and private action, the 1961-65 study gives
only one set of estimates in quantitative terms, as opposed to the alter¬
native estimates which previous studies had included.
6. Each of the long-term studies to date has been prepared by a Plan¬
ning Commission specially appointed for the occasion and assisted by
a temporary Secretariat. The latest Commission, like its predecessors,
had close but informal contacts with private firms and associations,
public bodies and research institutes ; in particular, it asked firms and
sections to produce plans and forecasts of output, investment and man¬
power requirements. Two distinct advantages were gained by this pro¬
cedure : the Commission was able to take advantage of first-hand expert
knowledge and advice ; and it served to encourage planning and research
in both the private and the public sectors. Experience has shown, how¬
ever, a need for greater continuity in the long-termplanning process and
the Government has recently set up a new Economic Planning Council
consisting of economic expertsfrom the authorities,research institutions,
industry, commerce and the labour market organisations. The Council
is headed by the Minister of Finance and served by a permanent secre¬
tariat inside the Ministry of Finance. The Council's first task is to
follow up the 1961-1965 study, revise it as necessary in the light of
later experience and changing prospects, and to organise and intensify
research on longer-term development problems.
Targets for the 1961-1965 period
Forecasts
7. The Commission assumes that it should be possible to raise the
rate of growth of the realgross national product from 3.5 per cent in the
1950's to 4 per cent in the first half of the 1960's. The projected move¬
ment of employment and productivity is illustrated in table 1.
Table 1. Production and Employment
Annual rate ofgrowth, per cent
1950-1960 1960-1965
Real gross national product (cid:9) 3.5 4.0
Number of persons employed (cid:9) 0.6 0.8
Output per employed (cid:9) 2.9 3.2
Source : The Swedish Economy 1961-1965, Report of the 1959 Long-Term Planning
Commission, Stockholm 1963.
8. The natural increase in the labour force will remain moderate and
the further extension of education will reduce the rise in employment.
But married women are expected to enter the labour force in increasing
proportions, and the rate of immigration (net) is thought likely to remain
at about 10,000 a year, as in the 1950's ; without these two sources of
supply, the labour force would have remained practically unchanged.
9. The productivity estimate has been influenced by three main con¬
siderations. First, the active labour market policy developed in recent
years will not only increase the supply of labour but, it is hoped, step
up productivity by helping to steer labour into the higher productivity
sectors. Second, growing expenditure on research, technical develop¬
ment, training and re-training should have a favourable influence. Third,
the rate of investment is expected to remain at the high level achieved
in 1960, implying that in the 1961-1965 period gross fixed asset for¬
mation will be 25 per cent higher than during the previous five years.
10. The plan aims at an improvement in the current external balance*
(in constant 1960 prices), from a deficit of Kr. 300 million in 1960 to
Including Kr. 300 million of errors and omissions assumed to consist
of net current receipts.
a surplus of Kr. 500 million in 1965. It is felt that some increase in the
foreign exchange reserves will be needed; furthermore, it is assumed
that there will be a sharp increase in aid to developing countries. Up to
1961 Swedish development assistance was relatively modest and in 1960
the grants, long term loans and contributions to international organi¬
sations for this purpose took a much lower share of the gross national
product than for the O.E.C.D. countries combined. But the appropriations
for official development assistance have lately been increased rather
sharply from Kr. 50 million in 1961-1962 to Kr. 130 million in 1962-1963
and to Kr. 180 million in 1963-1964.
11. Onthe assumption of a 36per cent increase in merchandise exports,
and with a more moderate rise in net invisibles earnings, there is scope
for a 30 per cent increase in imports. Terms of trade are not expected
to change much. The Commission stresses the uncertainty of the esti¬
mates and discusses some of the implications of a less favourable
development.
12. Savings were at a high level in 1960, and the movements envisaged
for investment and the current external balance (see table 2) imply only
a moderate increase in the national savings ratio (in constant prices);
some increase in the savings ratio is expected to result from the National
SupplementaryPensionScheme introduced in 1960. (See paragraphs43-46.)
Table 2. National Product and Expenditure
ANNUAL BILLION p^îîp
PERCENTAGE KRONER "^"^l~
CHANGE, VOLUME CHANGE
19.50- 1955- 1950-
55 60 602) 1960 1965 1960-65
Gross fixed investment (cid:9) 3.4 4.8 4.4 20.20 24.85 4.2
Change in stocks (cid:9) 1.45 0.90
Current external balance (cid:9) -0.60 0.20
Total capital formation .... 2.7 4.5 3.7 21.05 25.95 4.3
Public civilian consumption . . . 4.7 4.3 4.6 7.40 9.30 4.6
Military expenditure (cid:9) 7.9 1.6 4.2 3.05 3.45 2.5
Private consumption (cid:9) 2.5 2.7 3.2 37.20 45.00 3.9
Gross national product (cid:9) 3.0 3.3 3.5 68.70 83.70 4.0
1. The table is based on Swedish definitions which differ from those used by the
O.E.C.D.; the main difference is that fixed inrestment, according to Swedish definitions,
includes rapair and maintenance.
2. Based on exponential regression line.
Source : The Swedish Economy 1961-1965, Report of the 1959 Long-Term Planning
Commission, Stockholm, 1963.