Exports will drive growth
Growth is expected to recover from 1.3% in 2005 to average 3% over the next two years, in part reflecting a bounce back from the effects of a labour dispute in the paper industry. Net exports, rather than consumption, will become increasingly important for driving growth.
With output and exports from the electronics industry picking up, GDP growth will recover strongly into 2006. However, outsourcing of production and increased competition could mean continuing losses in export market share. Unemployment will fall towards 7% in 2007, though job creation will likely be below government targets. Measures to reduce early retirement and motivate job search as well as to contain public spending pressures will be important.
|Population (000s), 2004||5 288|
|Area (000 sq km)||338|
|GDP (Billion USD), 2004||185.9|
|Life expectancy at birth (Women, Men), 2003 ||81.8, 75.1|
|Total labour force (000s), 2004||2 615|
|Indicators||% change unless otherwise indicated|
|Consumer price index||0.8||1.3||1.7|
|Short-term interest rate (%)||2.2||2.2||2.9|
|Unemployment rate (%)||8.6||7.9||7.3|
|General government financial balance (% GDP)||2.1||1.8||1.5|
|Current account balance (% GDP)||3.5||3.2||3.6|
© OECD Observer
, No. 252, November 2005