Economic activity grew rapidly in the first half of 2006. Strong growth this year is partly explained by the rebound from last year’s labour dispute in the forestry industry. But underlying growth is also robust, with output expected to expand at close to its trend rate of 3% over the next two years. Unemployment is projected to fall to around 7% by the end of the projection period, which would be the lowest rate since the early 1990s.
To facilitate job creation and alleviate bottlenecks in labour supply due to the ageing of the population, remaining pathways to early retirement should be phased out and greater wage flexibility in the central wage agreements put in place. To avoid a pronounced house price cycle, incentives for municipalities to provide land for house building in fast-growing regions need to be sharpened.
|Population (000s), 2005||5 246|
|Area (000 sq km)||338|
|GDP (Billion USD), 2005||164.6|
|Life expectancy at birth (Women, Men), 2004||82.3, 75.3|
|Total labour force (000s), 2005||2 641|
|Indicators||% change unless otherwise indicated|
|Consumer price index||1.3||1.4||1.5|
|Unemployment rate (%)||7.8||7.6||7.4|
|General government financial balance|
|Current account balance (% GDP)||6.8||7.4||7.7|
No. 258/259, December 2006