OECD Economic Surveys : Sweden 1973.

58 Pages·3.516 MB·English

by  OECD

RGAHISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION OE COOPERATION ET OE 0 E V E L 0 P P E M E N T ECONOMIQUES
BASIC STATISTICS OF SWEDEN
THE LAND
Area(1OOOsq.km) 450 Inhabitantsin majorcities,
Lakes(IOOOsq.km) 39 includingsuburbs(endof1971).
Arablearea(I OOOsq.km) 31 thousands:
Woodland(I000sq.km) 228 Stockholm 1 352
Gothenburg 686
Malmo 449
THE PEOPLE
Population(end of 1972) Net natural increase per I 000
No.ofinhabitants persq.km inhabitants(average1968-1972) 3.6
Net natural increase Netimmigration (average 1968-1972) 19400
(average 1968-1972)
PRODUCTION
GrossDomestic Productin 1972 Grossfixedcapitalformationin 1972:
(Kr.million) 198648 PercentofGDP 22.1
GDPperhead, USS 5080 Perhead, USS 1 120
Employment:
Totalcivilian(thousands) 3862
Percentoftotal:
Agriculture,forestry,fisheries 7.4
Industry 28.2
Other 64.4
THE GOVERNMENT
PercentofGDPin 1972: CompositionofParliament(no.ofseats):
Publicconsumption 24 Socialdemocrats 163
Generalgovernmentcurrentrevenue 52 Liberals 58
Publicgross fixed capitalformation 9 Conservatives 41
Percentofgeneralgovernmentrevenue Centre 71
in 1972: Communists 17
Publicdebt,end of1972 36 350
Fiscal year: Last generalelection:September 1970
Centralgovernment: 1stJuly-30th June
Nextgeneralelection: September 1973
Localauthorities:calendaryear
FOREIGN TRADE
Fxports ofgoods and services as pei cent Imports ofgoods and services as per ci
ofGDP(average 1968-1972) ofGDP(average 1968-1972) 23
Mainexportsin 1972(perceni oftoial Main importsin 1972(percentoftotal
merchandiseexports): merchandise imports):
Forestry products Fngincering products
Engineeringpioduets(excludingships) (excluding ships,etc.) 33
Iron andsteel Rawmaterials(non-edible)and fuels 15
Ironore Metalsand metal products 13
Food, beveragesandtobacco 10
THE CURRENCY
Monetary unit: Krona Currency units per US S. central rate:
from 20.12.1971 4.8129
from 14.2.1973 4.5600
Noth An international comparison ofcertain hasic statistics is given in an annex table.
OECD ECONOMIC SURVEYS
Archives
Références
DOC PRÊTÉ -
RETOUR BUREAU '-<o
SWEDEN
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The Organisation for Economic Co-operation and
Development (OECD) was set up under a Convention
signed in Paris on 14th December, I960, which 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 maintaining financial sta¬
bility, and thus to contribute to the development oj
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 of world trade on a
multilateral, non-discriminatory basis in accord¬
ance with irUernational obligations.
The Members of OECD are Australia, Austria,
Belgium, Canada, Denmark, Finland, France, the Federal
RepublicofGermany, Greece,Iceland,Ireland,Italy,Japan,
Luxembourg, the Netherlands, New Zealand, Norway, Por¬
tugal, Spain, Sweden, Switzerland, Turkey, the United
Kingdom and the United States.
The Socialist Federal Republic of Yugoslavia is
associated in certain work of the OECD, particularly that
of the Economic and Development Review Committee.
»*
The annual review of Sweden
bytheOECDEconomicandDevelopmentReviewCommittee
took place on 9th May1973.
© Organisationfor EconomicCo-operationand Development,1973.
Queries concerning permissions or translation rights should be
addressed to :
Director ofInformation,OECD
2, rueAndre-Pascal, 75775 PARIS CEDEX 16, France.
CONTENTS
Introduction
I Departures from past trends 5
Exogenous influences 5
Policy influences 9
Balance ofpayments 12
Cost/price performance 14
II Changesin thelabour market 15
Nature ofthe unemployment problem 15
III The Swedish economy in 1973 21
Fiscal and monetary policies 23
Short-term prospects 25
IV Conclusions 32
TABLES
Text:
1 Net exports and stockbuilding during three recessions 7
2 Public sector revenue and expenditure 23
3 Money and credit 25
4 Supply and use ofresources 26
5 Household income and expenditure 27
6 Consumer prices 28
7 Gross fixed assetformation 29
8 Manpower policy measures 30
9 Balance ofpayments 32
StatisticalAnnex:
A Supply and use ofresources, current prices 36
B Supply and use ofresources, fixed prices 37
C Gross fixed asset formation, fixed prices 38
D Central government revenue and expenditure 39
E The National Pension Insurance Fund 40
F Balance ofpayments 41
G Quarterly national accounts 42
H Labour market 43
I Production, demand and employment by sector 44
J Foreign trade, total and by area 46
K Imports: value, volume, prices and by commodity group 47
L Exports: value, volume, prices and by commodity group 48
M Prices and wages 49
N Money and credit 50
DIAGRAMS
1 Sources ofgrowth 6
2 Household savings ratio 8
3 Trends in publicly influenced demand components 10
4 Demand impact ofpublic sector and housebuilding 11
5 Current external account 13
6 Unit labour cost in manufacturing 14
7 Labour force and employment 16
8 Employment by industry 17
9 Unemployment by professional groups 19
10 Registered unemployment and vacancies 20
11 Business tendency surveys 22
12 Trends in foreigntrade 31
INTRODUCTION
Recent years have seen marked departures from past trends. As in most
other Member countries the last two to three years have been marked by
recessionarytendencies,butthelevelofactivityinSwedenhasheldupmuchless
well than in earlier post-warrecessions. Part I ofthe present Survey analyses
the main factors behind this development as well as the improvements ofthe
current external account and the price/cost performance accompanying the
weak trend in activity. Important structural imbalances have appeared in
thelabour market, partly reflectingchanges inthepattern ofdemand (Part II).
Exports and industrial production recovered strongly in the second half of
1972, and the upturn in activity should continue in the present year. But
with demand managementpolicyremainingcautious, theriseinreal GDP may
not significantly exceed the five per cent mark. In these circumstances, and
given the structural labourmarketimbalances that have developed, unemploy¬
mentmayremainhigherthanusual for sometimetocome (PartIII).
I DEPARTURES FROM PAST TRENDS
Diagram 1, showing the sources ofgrowth in terms ofannual changes in
major GDP components over the last decade, illustrates the relatively weak
trends in activity during the recent recession. Over the two years 1971 and
1972, real GDP rose at an average annual rate of some 1 per cent. Total
domestic expenditure was even weaker showing virtually no change involume
overthetwoyearstakentogether. Analysingthefactorsbehindthesedevelop¬
ments, it is of some interest to distinguish between exogenous influences, i.e.
the deflationary impulses the economy has received, and policy factors, i.e.
theextenttowhichpolicyhasorhasnotbeen abletocounteracttheseimpulses.
Exogenous influences
Although the distinction between exogenous and policy factors is not
clear-cut most types of demand are influenced by both exogenous and
policy factors it is probably true to say that exports and stockbuilding are
largely determined by exogenous influences. Diagram 1 shows that inventory
demandwasweakerinthelasttwoyearsthanduringthetwo earlierrecessions,
i.e. 1962-63 and 1966-67, despite the fact that during the recent period policy
OECD EconomicSurveys
DiagramJ SourcesofGrowth
Changefrompreviousyearaspercent ofprevious year's GDP, volumeterms
7 |- GROSS DOMESTIC PRODUCT
6
5
4 h
3
2
1
0 -
2 FOREIGN BALANCE
]
0
-1
-2
INVENTORY FORMATION
1
2 -
0
-1
-2
2 BUSINESS INVESTMENT
1
0
-1 -
3 POLICY CONTROLLED EXPENDITURE'
2 -
1
6 -
5 . PRIVATE CONSUMPTION
4
3
2
l h
o
-l
L
1960 61 62 63 64 65 66 67 68 69 70 71 72 73
1 Publicconsumption, public investment and dwellingconstruction.
Sources: Swedish National Accounts and Revised National Budget for 1973.
Sweden
measures were taken to stimulate it1. Since the import content in stockbuild
ingishigh,probablyabout50percent, thedeflationaryimpactontheeconomy
of the marked decline in inventory formation has been attenuated by slower
import growth. In these circumstances, it may be appropriate to consider
the movement ofnet exports and stockbuildingcombined (see Table 1).
Table 1 Net Exports and Stockbuilding During Three Recessions
Changefrom previous year, annual rate, per cent ofprevious year's GDP
1962-63 1966-67 1971-72
Stockbuilding -0.5 -1.2 -1.5
Net Exports +0.2 +0.5 +1.1
Total -0.3 -0.7 -0.4
Business fixed investmentis also acyclically sensitive demand component.
Judging from Diagram 1, it showed a countercyclical movement in 1971-72,
unlike its development during the previous cycle. During the recent period,
however, very strong policy measures were taken to stimulate business fixed
asset formation2. This was also the case in the two previous recessions, but
although the impact of these measures is difficult to assess, it may well be
true that " pure " business fixed investment in the last two years wasweaker
thanin thetwo earlier episodes.
During previous recessions, private consumption typically held up well,
partly reflecting the fact that employment was sustained by an active counter¬
cyclical policy. In 1971, however, private consumption fell in real terms, in
markedcontrasttotheauthorities'expectationofa3percentincrease(National
Budget, January, 1971). The deviation was largely due to a sharp rise in the
savings ratio; households' disposable income andconsumer pricesroseroughly
in line with expectations. Since the change in the savings ratio was probably
largely unrelated to economic policy, it may be appropriate to consider this
changeasanexogenousinfluence.
According to official national accounts statistics, the personal savings
ratio, after having fluctuated narrowly around the 6 per cent level during the
first half of the 1960's, fell steadily during the second half of the decade to
2.2 per cent in 1969. It was generally assumedthatthismovementwaspartly
due to the introduction of the supplementary pension scheme in 1960 which,
1 The timing of recessions has generally not coincided with calendar years and the
various demandcomponentsdo notseemtohavefollowed thesamepattern offluctuations.
Asfarasstockbuildingandexportsareconcernedthetwo2-yearperiodsreferredtoseemto
bethosemostcomparablewith 1971-72.
2 Release of investment reserve funds, special depreciation allowances and large
subsidies to environmental investment. It is difficult to assess theeffect ofthese measures
since enterprises, in their planning, may assume that measures will be taken to stimulate
investment, notably, areleaseofinvestmentreservefunds. Itislikely, however, thatin the
absenceofmeasures investment wouldhavedeclined in 1972when cashflows were reduced
and capacity utilisation was low.
OECDEconomicSurveys
Diagram2 Household SavingsRatio
Savingsaspercentofdisposableincome
7
6
5
4
3
2
1 L
0 »-
I960 61 62 63 64 65 66 67 68 69 70 71 72
Sources:SwedishNationalAccountsandRevisedNationalBudgetfor1973.
when fully implemented, would provide everybody with a pension large
enoughto substantiallyreducetheneedforsavingforthe purpose ofmaintain¬
ing a certain standard ofliving after retirement.
However, the savings ratio rose again to 3.5 per cent in 1970 and then
jumped unexpectedly back to the 6 per cent level (6.2 per cent) in 1971. To
someextentthismovementmayhavebeeninfluencedbysomeshiftofconsumer
spending from 1971 to 1970 in response to the increase in indirect taxation at
the turn ofthe year; this, however, would not explain the fact that the savings
ratioremained atahighlevel in 1972. Moreuncertainemploymentprospects,
and growing demand for one-family houses (for which, in contrast to appart-
ments, a more substantial part of the financing must be arranged by the
owner) may have contributed to higher savings, but are hardly sufficient to
explain the size ofthe change in the savings ratio. It may be relevant that in
the national accounts statistics, savings are determined as a residual between
the estimates oftwolargeflows: disposableincomeandconsumerexpenditure;
relative small errors ofestimation in one ofboth ofthesecouldhaveapropor¬
tionately big impact on the balance between the two. But it may also be
relevant to note that the increase in the personal savings ratioinSwedenisnot
out oflinewith trendsinmany othercountriesinthelastfewyears,movements
forwhichfully satisfactoryexplanationscannoteasilybefound.
Onthe basis ofthis rather impressionistic analysis, it would seem that the
deflationary impulses the economy received in 1971 and 1972 were stronger
than during the two previous recessions, and that in particular the sharp and
unexpected rise in the personal savings ratio was an important element in the
weak domestic demand in the last two years.
8