Strong employment growth
Following a slowdown in the first half of 2005 due to weaker foreign demand, growth is expected to pick up, underpinned by the strengthening of export markets and increased public investment, fuelled by high oil revenues.
Headline and core inflation rates have come down to the central bank’s target of around 3% and are expected to continue a gradual decline. Employment is growing at a relatively strong pace.The central bank eased its stance in the second half of 2005. On the fiscal front, the deficit target of 0.2% of GDP in 2005 will be easily met, thanks to higher than projected oil revenues. The draft budget for 2006 targets only a moderate consolidation, as lower oil revenues are assumed. A revenue enhancing tax reform is needed to address spending needs, while reducing the vulnerability of public finances to oil price volatility.
|Population (000s), 2004||104 000|
|Area (000 sq km)||1 996|
|GDP (Billion USD), 2004||676.1|
|Life expectancy at birth (Women, Men), 2003 ||77.4, 72.4|
|Total labour force (000s), 2004||42 566|
|Government type||Federal Republic|
|Indicators||% change unless otherwise indicated|
|Consumer price index||4.0||3.5||3.3|
|Short-term interest rate (%)||9.5||8.9||7.4|
|Unemployment rate (%)||3.6||3.4||3.4|
|Current account balance (% GDP)||-0.9||-1.1||-1.4|
© OECD Observer
, No. 252/253, November 2005