The recession ended in the spring of 2005. Domestic demand has been stimulated by labour deepening, disinflation, fiscal ease and supportive monetary conditions.
Exports have benefited from euro depreciation and recovery elsewhere in the euro area, but imports are also rising markedly. The pass through of higher oil prices will limit the strength of the recovery in 2006, but as these effects dissipate, household consumption should support an acceleration of GDP in 2007.The sustainability of the recovery depends on reversing highly unfavourable trends in international competitiveness and public debt. In particular, real wage growth needs to be better aligned with productivity, while public spending must be restrained sufficiently to lower the tax wedge and restore the primary surplus. Service sectors should be opened to competition to boost productivity.
|Population (000s), 2004||57 553|
|Area (000 sq km)||301|
|GDP (Billion USD), 2004||1 677.9|
|Life expectancy at birth (Women, Men), 2003 ||82.9, 76.9|
|Total labour force (000s), 2004||24 365|
|Indicators||% change unless otherwise indicated|
|Household savings ratio||12.1||11.8||11.8|
|Consumer price index||2.1||2.7||2.2|
|Short-term interest rate (%)||2.2||2.2||2.9|
|Unemployment rate (%)||7.7||7.5||7.4|
|General government financial balance (% GDP)||-4.3||-4.2||-4.8|
|Current account balance (% GDP)||-1.5||-1.9||-2.3|
© OECD Observer
, No. 252/253, November 2005