Prepare for ageing
Growth should remain strong in 2006 and 2007, close to potential rates (slightly above 3%), driven by buoyant domestic demand and some pick-up in exports following recovery in Europe.
Headline inflation is expected to abate somewhat after its recent hike, and core inflation should remain broadly stable, but the differential with the euro area average is likely to persist, further eroding competitiveness. Though slower growth in consumption and construction investment is expected to mid-2006, investment in machinery and equipment should keep expanding.Moving to a tighter fiscal stance would be desirable to reduce domestic demand pressures and to prepare for the fiscal consequences of ageing. Halting the deterioration in competitiveness will also require making the automatic wage indexation system more flexible. The priority given by the authorities to redirecting government spending to enhance productivity growth is welcome.
Population (000s), 200442 692
Area (000 sq km)505
GDP (Billion USD), 20041 040.0
Life expectancy at birth (Women, Men), 2003 83.7, 72.2
Total labour force (000s), 200420 172
Government typeParliamentary Monarchy
Indicators% change unless otherwise indicated
GDP growth3.43.23.3
Household savings ratio6.76.86.8
Consumer price index3.43.02.8
Short-term interest rate (%)
Unemployment rate (%)
General government financial balance (% GDP)0.3 0.3 0.2
Current account balance (% GDP)-7.7-8.9-9.8
Source: OECD© OECD Observer, No. 252/253, November 2005

Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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