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Transcription

(R p blic~o1~rance
COPING WITH GLOBAL UNCERTAINTIES
Report on the 1990 French National accounts
English Edition
INSTITUT NATIONAL
lillllli~l
1S ECONOMIC UU,
Republic of France
Institut national de la statistique et des études économiques
COPING WITH GLOBAL UNCERTAINTIES
REPORT ON THE 1990 FRENCH NATIONAL ACCOUNTS
ENGLISH EDITION
Directeur de la publication: Jean-Claude Milleron
© 1991 by Insee.
All rights reserved. No part of this book may be reproduced in any
form, by photostat, microfilm, xerography, or any other means, or
incorporated into any information rctrieval system, electronic or
mechanical, for any purpose other than those defined in article 41
of the French copyright law of March 11, 1957, without the written
permission of Insee.
2 1990 NATIONAL ACCOUNTS
Note to the English edition
At the end of June, Insee issues the Rapport sur les comptes de la Nation (report on
national accounts), which analyzes the economic developments of the preceding
year and serves as the basic for preparing the country's next budget.
The report is prepared by the Institute on behalf of the French govemment and in
collaboration with the Direction de la Prévision (finance ministry forecasting office),
the Comptabilité Publique (government accounting office) and the Bank of France.
The first part of the 1990 report was published as 1990: la France à l'épreuve des
turbulences mondiales. Drafted under the supervision of Jean-Charles Willard
and Myriam Finidori, it contains:
- The standard year-in-review section.
- A detailed comparative analysis of French and German external performance.
Despite the two countries' comparable growth rate and labor productivity, former
West Germany posted a current-accourt surplus equal to 4% of its GDP, white
France ran a 1% deficit (at 1989 prices). One of the causes of this differential is
that Germany spends more on research and development, that these outlays are
more evenly distributed throughout its economy, and that their practical results
are more rapidly disseminated.
- 61 notes with charts and tables on 1989-90 developments analyzed from a
medium-terni perspective, and grouped under eight sections:
1.The world slowdown.
2.The reasons for the persistence of France's external deficit.
3. The business environment: continued pressures on productive capacity,
and new patterns of investment behavior.
4.Employment: no immediate downward cyclical adjustment.
5. Household income: growth in nominal wages and salaries; the role of
transfer payments.
6.Consumption: the spending cutback; rise in the saving rate and financial
investment rate.
7.Money and financial markets: the success of mutual funds.
8. General government: a lower deficit; enactment of the Contribution
Sociale Généralisée (CSG), a social-security tax levied on earned and
unearned income.
The second part of the report, issued in a separate volume as Comptes et
indicateurs Economiques and also available on diskettes, contains ail the detailed
figures including data on other countries to permit international comparisons.
To order copies of the original French edition, please use the order form (page 37)
This English abstract of the year-in-review section was prepared by Edmonde
Naulleau (Insee) and Jonathan Mandelbaum (translator and editorial consultant).
1990 NATIONAL ACCOUNTS 3
CONTENTS
Overview.................................................................................... 7
Sharp fallback in the growth rate ...................................................... 9
Employment: continued buoyancy ................................................... 10
Decline in short-term employment ................................................................... 11
Year-end hait in the unemployment fall ........................................................... 14
Sharp increase in job-seekers among the most highly qualified categories........... 14
Fixed capital formation in the manufacturing industry kept constant
through heavier indebtedness ......................................................... 14
Continued investment in capital goods ............................................................. 14
Corporate operating margins narrowed by the rise in real wages ..................... 14
Saving rate depressed by surge in finance charges ........................................... 16
Greater use of bank credit ................................................................................. 17
A mixed year for large public-sector firms ....................................................... 17
Household income unaffected by slower growth .................................... 19
Decline in durable-goods consumption ............................................................ 20
Lowerinflation ................................................................................................. 20
Further recovery of the household saving rate .................................................. 20
Good performance of manufactured-products trade ................................. 23
Stabilized merchandise trade deficit ................................................................. 24
Expanding trade with the EEC .......................................................................... 24
Positive demand trends, tempered by competitiveness fosses .......................... 26
Stabilization of market share ............................................................................ 26
Sharp contraction of trade in services ................................................ 26
Further acceleration in the growth of capital flows ................................. 28
Rise in new investment instruments and growth of short-terni securities issues...... 30
Clearcut success for the Plan d'Epargne Populaire and mutual funds .............. 30
Sluggish financial market ................................................................................. 30
Slower growth in loans to households .............................................................. 31
Credit institutions exposed to keen competition and a higher cost of funds ........... 31
Stabilization of the rate of compulsory levies, while public spending
outpacesGDP ........................................................................... 32
Further reduction in the budget deficit .............................................................. 33
Higher social security contribution rates offset by a fall in the taxation rate ............ 33
The international setting ................................................................................... 35
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OVERVIEW
French growth slowed sharply in 1990: gross domestic product (GDP) rose 2.6%
in real terras compared with 3.7% in 1989 and 4% in 1988. Meanwhile, market
GDP also rose 2.6% versus 4.3% in both preceding years.
Most OECD countries were also affected by the slowdown. The economies of
France's major partners grew approximately 2.7% in 19901 after 3.3% in 1989.
The United States and Britain registered a growth rate of less than 1%, while
Japan and Germany continued on an expansion course. The European Econornic
Community as a whole recorded a slowdown similar to the one observed in
France.
The Gulf crisis had a limited impact. The rise in energy prices remained very
modest, giving at most a slight momentum to the slowdown already under way.
Productive investment is still the engine of French growth. Households allocated
most of their real income gain to saving rather than consumption, which rose very
moderately. But the saving/investment imbalance was aggravated by the
downturn in corporate profits, higher expenses, and increased general government
consumption.
After an outstanding performance in 1989, French export growth declined
significantly. While Foreign demand—in particular from Germany—decelerated
more slowly than world trade, the francs appreciation against the dollar weighed
on French price competitiveness. The export-to-import ratio for manufactured
goods stopped falling for the first time since 1984, thanks to the favorable
movement in the terras of trade. By contrast, service exports slackened, and the
rise in the tourism surplus was weak compared with the French Revolution
Bicentenary year of 1989. The export-to-import ratio in nominal terms for goods
and services became negative for the first time in six years.
Domestic demand expanded moderately. Household consumption continued on
its upward course of the preceding years, but there was Little increase in purchases
of consumer durables, notably automobiles.
Investment growth weakened. Household residential purchases sagged, the pace
of general government investment eased slightly, and the growth rate of
investment by non-financial enterprises fell by nearly half. A contrast, however,
was visible between the manufacturing industry, where firms are still replacing
their capital goods, and the construction and service industries, where outlays on
capital goods are falling sharply.
1. French finance minnisdy forecasting office esti,nates, February 1991.
Tighter stock (inventory) management, particularly by retailers, amplified the
downturn in domestic demand.
Employment scored new gains in 1990. The slowdown in production activity had
little effect: 250,000 jobs were created, or barely less than in the cyclical upswing
of 1989. The decline in short-terra employment persisted, especially in the
manufacturing industry, and there was only a very slight decrease at year-end in
the Humber of hours worked. Because of this slow adjustment in the employment
level to the production downturn, productivity gains for 1990 were the weakest in
a decade.
Unemployment, however, fell more slowly, for the number of people entering the
labor market rose faster than the number of hirings.
Households' share of national income, which had been falling since 1983, climbed
back in 1990. Gross wages and salaries rose faster than in 1989, when the rate of
social security contributions also increased. Higher pension and unemployment
benefits accounted for a continued brisk growth in overall social benefits.
Property income was buoyed by high interest rates and by the growth in saving.
The real disposable income of households posted an increase of 3.3% in 1990,
virtually the same rate as the 3.2% of 1989. This result was obtained through a
slight deceleration in prices: the final consumption price moved up 3.3% in 1990
compared with 3.6% in 1989.
The increase in the volume of service purchases was accompanied by an
acceleration in service prices that contrasted with the general disinflation
movement. Indeed, France achieved an outstanding inflation performance in
1990: the consumer price rise eased despite the disturbances affecting energy
prices. This moderation contrasts with the resurgent inflation recorded in most
partner countries. Only Germany experienced a similar pattern, and the FrenchGerman inflation differential held steady.
Corporate profits shrank. Operating margins were squeezed by heavier payroll
expenses, resulting from a large increase in nominal wages coupled with further
growth in employment levels. The increase in financial expenses, linked to high
interest rates and a three-year pattern of rising indebtedness, weighed on the
saving rate. The self-financing ratio declined further.
The fall in saving also affected general government owing to the strong growth in
its purchases of goods and services as well as in social benefits. Despite the
significant recovery of the household saving rate, domestic saving grew more
slowly than national investment. The saving/investment imbalance widened
sharply after five rather favorable years.
Monetary and financial developments were characterized by slack markets, high
interest rates and sharp exchange-rate swings. The firmness of the franc and a
restrictive monetary policy promoted a reduction in the French-German interestrate differential. The confidence of foreign market participants in the francs
stability accelerated the internationalization of French public debt. High real
yields attracted deposits and investments by non-residents. Despite the steady
progress of French direct investment abroad, the balance of interest and dividend
payments between residents and non-residents widened unfavorably for France
and weighed on the nations net borrowing.
Sharp fallback in the growth rate
After two years of robust growth, the French economy visibly slowed in 1990.
Market gross domestic product (GDP) gained 2.6%, or 1.7 points less than in
1988-89. Total GDP registered an identical increase. This slowdown, first
observed in the second half of 1989, lasted into 1990 except for a slight recovery
in the third quarter.
The downturn affected the entire economy. The output of market branches rose
3.9% compared with 5.7% in 1989. Only agrifoods were more dynamic in 1990
than 1989. Manufacturing—particularly intermediate goods and transportation
equipment—was the hardest hit, expanding only 1.7% after 5.2% in 1989.
Although it also contracted, the services sector maintained a brisk growth rate,
with the slowdown mainly affecting non-financial business services.
The share of manufacturing in the growth of value added shrank correspondingly
(chart p). Wholesale/retail trade and non-financial services again made the
largest contribution.
The growth rate of final con~umption has remained stable at about 3% since
1987, indicating a certain inertia in the face of the fluctuations in economic
activity. In the slowdown, final consumption resumed its yole as the fastestexpanding element of growth, contributing two points to market GDP (chart p).
Contribution of
major branches
to growth in
value addedl
1987
1988
LII
/989
/990
Manufacturing
I. In real terras at previous years prices
M Construction, civil engineering and rural engineering
M Wholesale and retail trader non-financial services
Source: Comptes de la Nation 1990, Insee
O
Contribution to
market GDP
growthl
-2
-3
I. In real terms al previous year's prices
/989
® 1990
Employment: continued buoyancy
The mid-1989 slowdown in production activity had little effect on jobs in 1990.
Employment increased even in the hardest-hit branches of manufacturing. Job
creations totaled 250,000, barely less than in 1989, when the number of people at
work rose by 270,000 (table 0). Labor productivity gains were particularly weak
in 1990.
Although typical, this lag between the production cycle and the employment cycle
was surprising in its size. Two factors may account for this. First, corporate
executives, underestimating the scope and persistence of the economic slowdown,
may have failed to conduct a thorough review of their previous hiring
commitments. Second, even at the start of 1990, the pressures on productive
capacity remained very strong. In particular, firms were making intensive use of
the labor factor and had difficulty finding new staff. The production slump eased
these pressures without significantly affecting employment.
The number of hours worked effectively decreased, especially in the last quarter.
Overtime was reduced, and firms resorted increasingly to part-time
unemployment. The sharpest falls appear to have occurred in the automobile
industry, rubber/plastics, textile/clothing and mechanical engineering.
Non-market services are the only services where employment levels probably rose
much faster than in 1989. This acceleration appears to be due to the rapidincrease in "employment-solidarity contracta" (CESs) which offset the decline in
"community-service employment schemes" (TUCs) observed in 1988 and 1989. In
the civil service and the non-profit associations sector, job creations remained steady.
Numbers
at work at
Dec. 31, 1991
(thousands)
annual change over
year earlier
1987
WAGE AND
SALARY EARNERS
• Agriculture
1988
1989
+ 1.4
-0.4
+ 1.7
- 1.0
+ 1.5
- 0.8
18,920
262
- 2.4
- 0.8
- 0.5
- 0.3
+ 0.9
- 0.2
+ 0.3
+ 1.3
-2.2
0
-2.9
+ 0.6
4,669
527
259
3,883
•Industry
Agrifoods
Energy
Manufacturing
of which:
üuerntediate gonds
Producer durables
Consumer durables
- 1.6
- 3.4
- 2.8
+ 0.4
- 0.8
- 0.6
+ 2.1
+ 1.5
+ 0.3
+ 0.7
+ 1.0
0
1,241
1,517
1,126
•Construction, civil engineering
and rural engineering
+ 1.2
+ 2.8
+ 1.7
+ 1.8
1,278
+ 2.7
+ 1.7
+ 3.0
+ 1.6
+ 3.0
+ 1.7
+ 2.3
+ 1.4
8,396
2,138
+ 0.6
+ 4.6
+ 0.4
+ 3.4
+ 1.2
+ 4.9
+ 0.7
+ 3.6
1,345
4,247
+ 9.7
+ 6.4
+ 37.8
+ 0.3
+ 11.6
+ 7.2
+ 40.3
- 0.4
+ 9.4
+ 7.1
+ 20.7
- 0.5
+ 5.9
+ 8.0
- 3.2
0
1,400
1,164
236
667
•Non-market services
+ (1.4
+ 0.4
+ 0.3
+ 1.5
4,315
NON-WAGE AND NONSALARIED EMPLOYMENT
• Agriculture
•Non-agricultural sectors
- 0.7
- 4.2
+ 1.5
- 1.0
-43
+ 0.9
- 1.5
- 4.2
0
- 1.3
- 4.2
+ 0.1
3,149
1,039
2,134
TOTAL EMPLOYMENT
+ 0.4
+ 1.1
+ 1.2
+ 1.1
22,069
Wage and salary earners in
non-agricultural private sector
+ 0.8
+ 1.8
+ 2.2
+ 1.6
14,344
•Market services
Wholesale and rctail trade
Transportation and
communications
Other market services
of which:
Business services
Evcluding te nporarv jobs
Tenporary jobs
Financial services
-2.6
- 0.4
Employrnent
by branche
1990
+ 0.7
- 1.4
-2.2
- 2.7
Q
1. Temporary workers are included in "Business services" and not in the sectors where they are actually
employed-typically the construction industry, civil engineering, rural engineering, and intermediate-goods
and producer-durables industries. As a result, changes in employment levels are underestimated in
manufacturing and the construction industry, and overestimated in services.
Source: Division Emploi, 1990, Insee
Decline in short-term employment
The trend toward greater stability in new jobs, which emerged in 1989, gathered
pace in 1990. The number of open-ended employment contracts rose slightly
more rapidly than in 1989 in the non-agricultural market sectors, with an increase
of 305,000 versus 280,000. Short-term employment fell for the first time rince
1983. Firms have given priority to further hirings for long-term jobs, particularly
in manufacturing and in the market services sector, while adjusting to lower
demand by reducing short-terni job contracts. Overall, the rate of short-term
1990 NATIONAL ACCOUNTS il
employment moved down from 6.5% of total employment at year-end 1989 to
5.8% at year-end 1990 (chart @).
However, the rapid fall in unemployment observed in 1988 and 1989 slowed in
1990 (chart 0). The jobless rate, which stood at 9.0% at year-end 1990, declined
by only 0.1 points during the year, versus 0.6 points in 1989.2 The number of jobseekers registered with the National Employment Agency rose by 25,000,
compared with a fall of 60,000 in 1989. The increase was concentrated in the last
four months of 1990.
This phenomenon is probably compounded by two factors: first, the trend
increase in the population old enough to be gainfully employed (approximately
160,000 more people in this category at year-end 1990); second, the arrival on the
job market of about 10,000 recipients of the guaranteed minimum income (RMI)
and of roughly 20,000 immigrants. But two other factors exert an opposite
influence: the rising rate of school enrolment among 16-to-21-year-olds, and the
®
Short-term
employment as 8
a share of total
employment'
short-term
employment
6
Fixed-terra contracts
....... .. ....
....
4
2
..
....
Temporary contracts
- _ _ _ - —
_ _
1986
1987
1988
Training prograins
for Grst-time workers
1989
I
1990
I. In non-agricultural market sectors
2. The unemployment level as defined by the International Labor Organisation (ILO) and
observed in the March 1991 unemployment survey cou Id enta il a downward revision of
the jobless rate if, as in the four preceding years, the change in unemployment measured
according to international recommendations proves more favorable than the "month-end
number of job-seekers" gauge used in the French national statistics.
35
Q ILO-defined
%
unemployment
rate
Wornen trader 25
30
25
20
Men uncler 25
15
Women aged 2549
Total
/0
------------ --_
V
--''' Women ugecl 50 and over
........... . .........................
................. . ....
Men agcd 25-49
5
Men aged 50 and over
/985
1986
/987
/988
1989
1990
dip in the trend growth of the adult female participation rate.- From 1985 to 1989,
the working population of metropolitan France has increased by an average of at
least 85,000 a year.
In 1990, the programs to facilitate the employment of young people and the longterm jobless expanded, keeping several tens of thousands of people off the
unemployment rolls. The new measures introduced by the second "employment
plan" achieved satisfactory gains, while twice as many trainees were receiving
personalized "training-credit" at year-end 1990 than twelve months earlier. Four
hundred thousand housellolds were being paid the "guaranteed minimum income"
social benefit at year-end 1990. Although one of the eligibility conditions is a
commitment to seek employment or retraining, fewer than 40% of the recipients
had met that requirement.
3. The participation rate of a population categorv is the ratio of (a) the working
population (people in ernployment + unenyploved) in the category to (h) the total
population of the category.
Year-end hait in the unemployment fall
The year-end resurgence of unemployment particularly affected young people
seeking their first jobs. While the youth unemployment rate registered a further
decline of 0.8 points in 1990, it remained well above the average. The jobless rate
rose again for adults aged 25 to 49, especially among men: this development is
related to the employment slump in the manufacturing industry. Despite a
favorable economic cycle and an active govermnent policy, no true improvement
has been achieved in long-term unemployment. Moreover, a growing proportion
of discouraged unemployed have given up their search for jobs.
Sharp increase in job- seekers among the most highly qualified categories
While blue-collar unemployment continues to fall, the white-collar jobless rate is
rising. The largest drops were recorded among the least qualified workers: -11.2%
for unskilled workers and -4.1% for serai-skilled workers. By contrast,
unemployment among managers, technicians and supervisory staff registered
increases ranging from 12 to 15%.
Fixed capital formation in the manufacturing industry kept constant
through heavier indebtedness
Continued investment in capital goods
Gross fixed capital formation by firms remained the most buoyant composent of
dornestic demand. The investment rate of private enterprises leveled off after a
five-year climb (chart p). That of unincorporated cnterprises and large publicsector firms rose. But productive investment seems to have slowed in the building
and construction industry, civil and rural engineering, services, and
wholesale/retail trade.
In manufacturing, the 1986 business recovery put sharp pressures on productive
capacity, causing capacity-linked investment to outpace modernization-linked
investment. In 1990, capacity utilization rates remained high, and the share of
capacity-linked investment did not decline until the end of the year. Although
short-terne demand is slackening, manufacturera stil) need to replace and
modernize their plant and equipment.
Corporate operating margins narrowed by the rise in real wages
After seven years expansion, the operating margin of private enterprises fell to
30.9% in 1990 from 31.7% in 1989 (chart Q).
The share of wages in value added rose, alter declining by an average 2% a year
since 1982. From 1982 to 1985, and again in 1988-89, this movement was largely
due to the fact that real wages grew more slowly than hourly labor productivity
® Investment ratel
22
20
18
16
/4
1. Ratio of gross fixed capital formation to value added.
Corporate and quasi-corporate enterprises, excluding large public-sector tirets.
0 Operating margin
32
(profit margin)i
28
24
70
75
80
85
89 90
I. Ratio of gross operating surplus to value added.
Corporate and quasi-corporate enterprises, excluding large public-sector firms.
gains (chart €). In 1990, that share rose 1.4%, mainly owing to a 2.9% increase
in real wages, whereas hourly labor productivity gained only 0.2%. The 1990 rise
in real wages was only partly offset by the 1.3% increase in the relative price of
intermediate consumption.
4. Wages are deflated hy producers' prices. Real wages are measured in terms of
proctucers' total payroll colts.
Q
Breakdown of
changes in wage
share of value
added'
/04
Logarithm
/00
Logarithm of
nominal operating margin
96
Logaritlun of real wage
(adjusted for change
in hourly productivity)
8b'
Lugarithm of wage share
of velue added
80
85
89
90
I . Corporate and quasi-corporate enterprises, exeluding large public-sector l'irms
Saving rate depressed by surge in finance charges
The saving rate of private enterprises fell 1.3 points to 15.4% (chart p). The
increase in finance charges (interest + dividends), already observed in 1989, was
amplified in 1990.
Between 1982 and 1988, falling operating margins and rising real interest rates
protnpted businesses to pay off their debts. The return to growth led them back to
financing their investments by borrowing. For this purpose, they relied heavily on
the financial markets. Dividends paid rose from 4.5% of value added in 1982 to
6.5% in 1989 and 7.1% in 1990. The total finance charge in 1990 reached 16.2%
of value added, or 1.6 points more than in 1989. Part of the burden was offset by
the equally steady rise in financial income. This reflects the growth in securities
purchases—particularly intense in the past five years—linked to the external
growth of firms and to their increasingly active management of liquid assets. Net
corporate finance charges reached 10.3% of value added in 1990, up 0.8 points
for the second consecutive year.
This rise must, however, be viewed in a proper perspective. In terms of the gross
operating surplus, of which it represents about one-third, it remained in 1990 at a
level comparable to that of the early 1970s. On the other hand, the development
worth emphasizing is the growth in dividends paid and received compared with
interest"—a trend fueled by the expansion of market financing, that is,
disintermediated financing."
© Gross corporate
saving rate]
/s
/6
14
12
10
75
80
70
85
L Ratio of gross saving to value added.
Corporate and quasi-corporate enterprises, excluding large public-sector fions.
89 90
Greater use of bank credit
The corporate self-financing ratio, which has been falling since 1987, stayed
above 80% in 1990 (chart p). As a proportion of value added, investment rose by
only one point between 1988 and 1990. On the other band, equity purchases5
climbed sharply (table Q). Since 1989, banks have once again been providing
most of the funds needed to compensate the saving shortage.
A mixed year for large public-sectorfirnis
Thanks to tighter cost controls at Electricité de France-Gaz de France (EDFGDF), the large public-sector firms in the energy sector recorded an increase in
their value added.
A nominal growth of 9.7% in total investment increased the net borrowing of the
transportation sector and reduced the net lending of the energy sector. The
transportation sector suffered from the sharp downturn in traffic at year-end. The
nominal value added of the state railroads (SNCF) was nearly unchanged, white
that of Air France fell by over 10%. Investment continued, in particular on the
SNCF's top priority program for the high-speed train (TGV), on heavyinfrastructure renovation by the Paris municipal transportation authority (RATP),
and on Air France's accelerated fleet modernization program.
5. Excluding purchases of',nutual-fond shares, which have been recorded here under
liquid assets.
O
Self-financing
ratio*
%
110 100
90
Self-financing ratio
in the strict senne
80
Self-financing ratio
in the broad sensc2
/ '
70
ti E E
o
60
'
80
75
70
85
89
90
* Corporate and quasi-corporate enterprises, excluding large public-sector firms.
I. Ratio of gross saving to gross fixed capital formation.
2.
Ratio of (gross saving + capital transfers) to (gross fixed capital formation + change in stocks
+ purchases of land and intangible assets).
Self-financing ratio in the broad sense + equity purchases in the denominator.
3.
Source:
Comptes de la Nation 1990, Insee
% of value added
e Private firms'
sources and
applications of
fundsl
1985
1988
1989
1990
Sources
Working-capital
requirement 2
Investment3
Equity purchases
Liquid assets and
investments
Balancing item
0.0
7.6
6.0
3.8
15.6
1.1
18.3
4.8
19.3
6.1
19.3
8.1
2.4
- 0.4
2.5
1.0
6.2
- 0.1
4.0
11.2
0.5
4.4
17.3
0.6
5.8
16.6
0.9
8.0
15.4
1.0
6.8
1.6
0.9
0.0
5.3
4.7
0.4
7.6
4.4
0.0
7.2
5.9
- 0.4
0.7
Applications
Gross saving
Net capital transfers
Equity issues
Long and medium-terra
debt
Short-terni debt
Negotiable debt
1.
Corporate and quasi-corporate enterprises. excluding large public-sector firms.
2.
Change in stocks and commercial loans.
Gross fixed capital formation and net purchases of land and intangible assets.
3.
Source:
France Télécom scored a sharp nominal increase in revenues after years of
outwardly poor performance owing to the introduction of VAT on
telecommunieations services in 1987-88.
Household income unaffected by slower growth
Real household income grew 3.3% in 1990, or by virtually the saine percentage
as in 1989 (3.2%). This performance was due to a slight deceleration in prices,
with the final consomption price rising 3.3% in 1990 after 3.6% in 1989.
Households share of national income had been falling since 1983. The movement
slackened in 1989 and reversed itself in 1990. The economic slowdown had no
repercussion on the income curve (chart m).
Unlike in 1989, the rate of social security contributions did not increase in 1990.
Real gross wages grew at the saure pace as total disposable income (table ©).
Higher pension and unemployment benefits accounted for a continued brisk
growth in overall social benefits.
In contrast to rent received, which continued to rise, unincorporated enterprise
income registered very weak gains. Property income was buoyed by high interest
rates and by the expansion of saving. It rose slightly less briskly than in 1989, but
accounted for nearly one-third of total-income growth. The increase in income
and wealth taxes—slightly greater than that of total disposable income—gained
momentum.
® Gross household
74
disposable income
as share of GDP
72
70
68
70
75
80
85
89 90
% growth rate
A Real household
disposable
income:
main
componentsl
1986
1987
1988
1989
1990
1990
n v al
ue
value
(FFbn)
Cross wages and salaries (a)
Social security contributions
2.0
0.7
2.6
2.9
3.4
2,435
actually paid ont (h)
Net wages and salaries ((a)
5.7
1.4
4.2
6.8
-0.3
5. I
2.1
5.1
0.4
1.3
4.4
3.8
-1.9
423
2,012
1,502
3.6
-2,2
7.8
2.0
2.3
2.2
6.0
12.0
5.1
0.8
0.4
2.6
3.8
Social bcncfus reccived
Income and wealth taxes
- (b))
Property incomet
Gross operating surplus
Gross disposable income
2.4
3.1
3.4
3.6
397
5.4
9.0
2.2
468
1,147
3.2
3.4
4,424
I. The dellator applied is Lite consumer price usine Lite previous year's consomption structure.
2. Dividends interest+ land incarne profit-sharing.
+
Source:
+
Comptes de la Nation 199)), Insec
Decline in durable-goods consumption
Total consumption growth dipped to 2.9% from 3.0% in 1989, while its share of
GDP rose slightly (chart m). The slowdown was clearly limited to durable goods,
which grew only 2.2% in real terms versus over 5% in 1986-89 (table p). The
year 1990 marks the end of the automobile-purchasing cycle begun in 1986, a
year of brisk recovery in real income.
Lower inflation
Consumer price growth recorded a further slowdown in 1990, with an annual
average increase of 3.4% versus 3.6% the previous year. Private services were the
only items to experience an acceleration. Health care, rent and public services
registered smaller increases than in 1989. The easing in food-price growth
resulted from a downturn in agricultural producers' prices, in particular for meat.
Further recovery of the household saving rate
The saving rate climbed to 12.0% in 1990 from 11.6% in 1989, accelerating the
recovery begun in 1987. By contrast, residential investment slackened, with
310,000 housing starts in 1987, 327,000 in 1988, 330,000 in 1989 and only
309,000 in 1990 (chart @).
Household financial saving was stimulated by the introduction of new taxsheltered investment plans at the end of 1989 (Plans d'Epargne Populaire or
PEPs), high real interest rates, increased liquidity due to the cutback in durablegoods purchases, and a more restrictive credit supply policy (chart p). The
conventional liquid savings instruments, long managed by the savings banks, are
coming under competition from PEPs and money-market mutual funds. As a
result, the liquidity/income ratio fell even more sharply in 1990. The
investment/income ratio declined from its 1989 level, as the vibrant expansion in
mutual funds did not offset the downturn in bond holdings. The growth in the
Household
consumption
as share of GDP
62
60
58
%growtlt rate
1985
1986
1987
1988
1989
199(1
Total major durables of which:
Automobiles
Television sets
Refrigerators and freezers
Washing machines
Furniture
Other major durables
Total semidurables of which:
0.2
0.3
2.4
-6.0
9.5
-3.2
2.9
-0.5
6.7
9.2
6.0
6.0
14.5
0.7
7.4
0.6
6.4
4.9
7.0
9.7
8.0
3.0
13.1
1.4
-0.2
-0.9
-0.6
3.5
Total nondurables of which:
2.5
3.9
1.2
-1.2
2.6
2.1
5.1
6.6
-1.5
4.1
4.0
2.9
5.7
2.0
0.4
3.7
2.2
0.8
5.0
9.2
0.5
0.7
6.0
1.9
Textiles and leather
Other semidurables
9.0
10.9
18.0
4.6
7.5
3.6
9.7
2.0
2.1
(.9
2.3
2.3
2.2
2.6
3.8
1.7
2.3
Nondurables other (han food
Food including animal products
Total services of which:
Housing 2
Medical and health services
including veterinary medicine
Public transportation. post and
telecommmnicationsa
Hotcl. restaurant. institutional food
and accommodation services
2.6
3.3
(.9
4.5
2.4
(.9
Household
consumption by
product
category I
1.5
2.3
3.9
3.2
4.0
3.2
4. I
3.0
1.7
3.9
3.9
3.9
3.9
6.2
7.1
2.2
5.6
6.9
7.6
3.3
(.5
4.3
4.8
4.5
2.7
2.1
3.6
4.2
Q
0.5
4.1
4.3
2.1
2.5
(.9
6.7
3.1
Other services
3.3
-0.8
3.3
Total national consomption including
non-market gonds and services
2.3
3.7
2.7
3.2
3.0
2.9
I. The deflator applied is the consumer price using the previous year's consumption structure.
2. lncludes heating and lighting expcnditures.
(990 NATIONAL ACCOUNTS 21
Q
Household
saving
rate
22
Total saving rate
2/
20
19
18
17
/4
/3
/2
11
16
14
/2
10
Residential
investment rate'
8
6
4
70
75
80
85
89 90
I. Household residential investment: gross fixed capital formation of households minus that of
unincorporated enterprises
i
® Household saving
rate components
14
12
10
$
6
4
2
Investments/incorne
4 2 -
0 10 —
8
4
/ \J\J
70
Loans/income
80
75
85
89 90
financial saving rate is ultimately a consequence of the fall in credit. The
credit/income ratio is now lower than its average level of the past twenty years,
and the effects of the end-1986 deregulation—which drove borrowing to a peak
in 1987—have faded away.
Good performance of manufactured-products trade
In 1989, global trade expanded three times as fast as the GDP of the main
industrial economies. In 1990, its growth rate fell to less than twice that measure.
The rise in world demand for French output, weighted by French market share,
remained stronger than global trade growth. France benefited from buoyant
German imports, while the geographic specialization of French exports gave the
country a relative protection against the U.S. recession.
Nevertheless, the balance of trade in goods and services posted a deficit of FF2
billion (table ©). While the manufacturing trade balance stabilized, exports of
services shrank in response to the world slowdown. The current-account deficit
climbed from FF27 billion in 1989 to FF42 billion in 1990.
Stabilized merchandise trade deficit
The nominal growth in merchandise trade was a sluggish 3% in 1990, compared
with 15% in 1989. The FOB-FOB deficit rose FF6.2 billion. But, for the first time
rince 1984, the balance of trade in manufactured goods recorded virtually no
decline (table p).
After its record high in 1989, the total agrifoods surplus scored a further gain in
1990, provided by processed products and food products. Trade in primary agricultural products gradually shrank during 1990 as a result of the sharp fall in
world prices.
The near-stability of the manufacturing trade balance stems from the slight
increase of FF2.1 billion in the civilian manufacturing deficit, partly offset by a
marginal rise of FF1 billion in the military equipment surplus. The balance of
trade in producer durables suffered from the deferral of Airbus sales due to the
autumn 1989 strike at British Aerospace. Excluding Airbus, the deficit would
have narrowed instead of rising FF5.3 billion. The automobile surplus rose by less
than FF2 billion in 1990 despite the outstanding 46% increase in French exports
to Germany. The consumer nondurables deficit widened significantly, while the
consumer durables deficit posted a modest reduction as in 1988 and 1989.
The low oil price at the start of 1990, coupled with the dollars fallback, partly offset
the impact in francs of the oil-price rise later in the year. Overall, the cost of
imported oil rose an average 9% in 1990. The increase in the energy deficit remained
moderate, bearing no comparison to the earlier oil shocks of 1973 and 1979-80.
Expanding trade with the EEC
France reduced its trade deficit with the EEC at the same time as its deficit with
Germany, contributing to the improvement in the French balance of trade with the
OECD as a whole (table @). Excluding the EEC, however, France's trade with the
OECD posted a deficit of nearly FFI l billion. The bilateral deficit with the U.S.
was aggravated by the loss of French price competitiveness due to the falling
dollar. The problems of planned economies in their transition to a market system
were reflected in a sharp drop in French exports, widening the deficit with that
zone by FF9 billion in 1990.
® Balance of trade
in goods and
services
12F/,ii (encrent)
Goods'
Services
Total
1986
1987
1988
1989
1990
-34
86
-66
73
-7!
75
-93
103
-99
97
52
7
4
10
-2
I. CIF-FOB balance: includes skip and aircraft fading, excludes miscellaneous.
FFbn (curreni)
1988
1989
1990
Agricultural and food products
39.3
48.2
51.0
of which:
Agricultural producls
Agrifoods industry products
30.2
9.1
34.1
14.1
34.5
16.5
Energy
- 66.6
- 83.3
-93.0
Manufactured gonds'
- 42.0
- 55.9
- 57.1
- 22.3
- 24.6
- 38.6
- 19.2
- 40.3
- 24.8
23.8
17.3
25.2
8.1
3.8
5.6
- 16.4
- 27.2
24.4
- 15.6
- 27.3
27.2
- 14.1
- 31.6
28.3
- 65.4
- 32.8
- 87.0
- 44.3
- 96.3
- 49.5
of which:
Intermediate goods
Pioducer durables
Land transportation
cquipmcnt
of which:
Autunmbiles and
spare porcs
Consumer durables
Consumer nondurablcs
Military equipment
CIF-FOB balance2
FOB-FOB balance 2
0 Balance of
merchandise
trade
I. Includes tnilitary eyuipment; excludes miscellaneous and ship and aircraft fueling.
2. Includes miscellaneous; excludes ship and aircraft fueling.
Source: French customs, 1990
FFbn
EEC
of which:
Marw/dcrrrring
OECI) excluding EEC
of which:
MamrJncrurin•t
OPEC
of which:
Mmnr/irruu'ing
Developing countries
excluding OPEC
of which:
Marurfacnrring
Countries with planned economies2
of which:
Manufacmring
1988
1989
1990
-43
-55
-411
-83
-101
-82
-39
-55
-65
-36
-50
-64
-3
-9
-11
+2-?
+30
+33
+5
+13
+8
+25
+33
+3)
-11
-8
-17
+3
+4
-3
Q French trade
balance by
broad
geographic
areal
I. CIF-FOB balance, excludes military equipment.
2. Albania, Bulgaria, China, Cuba, Czechoslovakia, East Germany, Hungary, Kampuchea, Laos, Mongolia,
North Korca, Poland, Romania, USSR, Vietnam.
Source: French customs, 1990
fi+iIll~/r Y[YLIJ/I•[KKt1Y1►YY•i~~7
Positive demand trends, tempered by competitiveness losses
The virtual stability of the manufacturing deficit results from the limited growth of
trade flows—up 4.1% in nominal terms—and the positive change in the terms of
trade. The franc appreciated by more than 6% against the currencies of France's
major competitors, reducing the value of French imports by 2.8%. Meanwhile, by
tightening their margins, exporters contributed to the 1.6% reduction in export prices.
The geographic segmentation of French exports has become more favorable since
1989. German expansion is stimulating France s exports, making up for the slow down
in the English-speaking countries. World demand for French products, weighted by
market share, was among the highest in the OECD in 1990 as in 1989 (table Q).
Stabilization of market share
In the face of these rather positive trends in demand, France's export performance
seems undistinguished (chart 4m). Unlike in 1989, manufacturing export volume did
flot expand enough to meet the full increase in foreign demand. The rising
franc and higher unit labor costs diminished the competitiveness of French products.
Sharp contraction of trade in services
The further improvement in the tourism balance was inadequate to make up for
the slump in market services exports, and even less for the very sharp worsening
of the balance on distributive transactions (table O).
© World demand
for
manufactured
goods weighted
by market share
of France and
other countries
% real growth
World demand for goods
manufactured by:
France
United States
Japan
former West Germany
Britain
Italy
OECD
1989
1990
9.3
9.2
8.0
8.5
8.7
8.9
8.8
7.2
5.2
4.2
5.6
7.3
7.1
6.0
Source: Direction de la Prévision (French finance ministry forecasting office), 1990
© Balance of trade
in invisibles
Effective trade in services
of which:
Business services
Tourism
Distributive transactions
(transfer payments, interest,
profits and dividends)
Total invisibles
1989
1990
22
31
22
30
23
34
39
28
41
- 20
- 35
- 63
25
35
0
Source: Direction de la Prévision (French finance ministy forecasting office), 1990
FFbn
1988
® Export
performance ant
competitivenessl
% real growth
10
8
6
4
2
0
-2
-4
World demand weighled hy French market share
Exports of manufacturcd goods
Parity-acljusted indexes, 1979= 100
//0
108
106
104
102
100
98
96
9-!
S6 i7 88 89 90
86 87 88 89 90
I. Price competitiveness relative to Fronces seven main partners: Germany, Belgium, Japon, Luxembourg,
Netherlands, Britain, U.S.
Source: Direction (le la Piévision(French ministry forecasting office), 1990
Tourism posted a FF41-billion surplus in 1990, up FF2 billion on 1989. This gain
is ail the more noteworthy given the circumstances—the French Revolution
Bicentenary celebrations—that made 1989 an exceptional year. These results
were achieved despite the francs appreciation and the year-end slump in global
travel and tourism brought about by the threat of war. France strengthened its
competitive position in Europe.
Market services trade posted a sizable decline. Exports stagnated owing to the
world economic slowdown, while imports swelled because of the French
contribution to certain European technological programs.
The FF28-billion deterioration on the distributive transactions account is partly
explained by the large increase in interest and dividends paid to the rest of the
world—a consequence of the rapid growth in non-resident holdings of francdenominated short-term securities and assets. The losses arising from the
sovereign debt cancellations decided on at the Dakar and Toronto summits
represented an extraordinary outflow of FF23 billion booked to the distributive
transactions account.
Further acceleration in the growth of capital flows
Despite a new increase in net long-term capital inflows, the basic balance
worsened owing to the deterioration in the current account and the inclusion of
debt cancellations (table m).
The deficit in the government and government-guaranteed lending sector
continued to weigh on the French balance of payments. The gap is due to the
pursuit of development aid policy, the consolidation of developing-country debt,
and the settlement by the French export credit insurance agency (COFACE) of
claims on guaranteed trade credits. Bank sector loans reflect the growth of
intercompany transactions within large financial groups.
The net balance of direct investment swung into further deficit owing to a surge in
French investment abroad. This trend concerned the manufacturing and energy
industries—where certain transactions reached high unit values (Rhône-Poulenc,
LVMH Moët Hennessy Louis Vuitton, Compagnie Française des Pétroles
(CFP))—as well as the banking and insurance sectors. The lifting of the last
remaining regulatory constraints on cross-border investment, together with the
relatively low degree of concentration in the services sector, is prompting many
French companies to prepare for the arrivai of the single European market. The
large public-sector firms are increasingly involved in such moves.
Purchases of French securities by non-residents reached a new peak. Foreign
investors focused on government securities. After the massive purchases of
fungible bonds (Obligations Assimilables du Trésor or OATs), Treasury bills with
maturities of more than one year were particularly sought alter in 1990. The
FFbn
I. Current transactions2
II. Capital transfers3
III. Long-term capital flows
1989
1990'
-27
-6
55
-42
-27
60
of which:
Connnercial credits
Loans
Securities transactions
-
8
40
143
10
-1
153
Foreign
French
Direct invesanenta
42
185
- 57
- 43
196
- 102
Private sector and batiks
- 54
- 99
of which:
-
of which:
of which:
French investmeu abroad
Foreign investnient in France
Public sector
IV.Basic balance (I + II + III)
V. Short-term capital flows
and balancing item
VI.Total balance (IV + V)
VII.Change in external
monetary position
of which:
Banks
Public sector
-
1/5
61
-3
-
141
42
-3
22
-9
-86
-64
- 80
64
90
37
27
® Balance of
payments
- 90
150
60
-
1.Provisional figures.
2.The balance of payments records the economic and financial flows between residents and nonresidents.
Its scope differs front that of the national accounts, as it includes both metropolitan France and its overseas
départements and territories.
3.Debt cancellations, which are booked as distributive transactions in the national accounts, are recorded
under capital transfers in the balance of payments, where their counterparts are included in long-term loans.
4.Direct investments abroad include startups of enterprises or establishments, acquisitions of equity stakes
of ut least 20%,, and parent-company bans to subsidiaries. They exclude profits reinvested by overseas
subsidiaries or branches.
Source:
French treasury, 1990
persistence and extension of the phenomenon were due to the diversification of
U.S.and Japanese investors international portfolios. Overseas confidence in
French government paper was boosted by the francs stability and the real interest
rate spread, which remained positive for France.
While the inflow of Foreign funds offset the deficit on the current account and the
direct investment account, short-terni capital movements were marked by wide
swings. French net assets abroad expanded sharply after the abolition of controls
on capital movelnents. The worsening of the monetary position masks a FF60billion increase in official foreign-exchange reserves and net inflows of FF150
billion in short-term bank capital.
Rise in new investment instruments and growth
of short-term securities issues
Clearcut success for the Plan d'Epargne Populaire and mutual funds
Nineteen-ninety was marked by the early success of the tax-sheltered saving plan
called Plan d'Epargne Populaire (PEP), the effects of the late-1989 legislation
allowing mutual funds to shift to a capitalization (dividend reinvestment)
structure, and cuts in taxes on life-insurance policier.
Launched at the start of 1990, the PEP achieved growth in excess of the most
optimistic forecasts, with FF105 billion outstanding by year-end. One reason for
its success is the product's intrinsic characteristics: simplicity, absence of capital
risk, relatively high returns, and the premium offered to low-income investors.
Another factor has been an intensive promotion campaign. Financial institutions
have seen the PEP as a means of gaining greater long-term control over the
volume and cost of funds.
The creation of capitalized mutual funds, first authorized in the fourth quarter of
1989, protects fund shareholders' earnings from taxation. The move gave new
momentum to short-term mutual funds, whose new share issues, including
capitalized income, more than doubled from 1989. It did not, however, prevent a
significant slump in long-terra mutual funds, which were hit by the stock market
crisis and the uncertainty over bond yield movements. In 1990, mutual funds
played a far greater intermediation role in the liquid-assets market than in the
stock and bond markets: their investment in money-market securities expanded
massively, while their purchases of equities and bonds contracted.
The second major form of collective investment was life-insurance instruments,
which recorded a further sharp gain of 19%. In addition to the existing benefits of
this type of product—tax-free income and exemption from estate duty—the
government abolished the tax on life insurance premiums as of July 1, 1990. Most
of the savings channeled into the insurance sector through these vehicles are
invested in bonds.
Sluggish financial market
After a very bullish 1989, the securities markets posted a fairly lackluster
performance in 1990.
New bond issues remained stable on a gross basis at FF327 billion in both years, but
dropped in net terms from FF227 billion to FF207 billion. In fact, government and
non-financial corporate issues expanded, while those of credit institutions were
significantly reduced. After a robust first half, the Gulf crisis sent stock market
prices tumbling by over 20% in the second half. New equity issues totaled FF228
billion versus FF247 billion in 1989. This downturn did not, however, affect
public offerings, which increased slightly over 1989.
Slower growth in Mans to households
The economic slowdown was accompanied by reduced credit growth. The rate of
increase in credit, including funding from the French government and the rest of
the world, declined from 11.9% to 11.1%. This slight dip actually corresponds to
two significantly différent trends for the two main borrower sectors—businesses
and households.
Businesses were faced with a severe increase in their borrowing requirement, but
found it harder to raise funds from the markets in 1990. They therefore continued
to borrow from the banking system at a brisk pace. As in 1989, their outstanding
debt rose by about 15%. Short-term credit facilities expanded more than
investment credit.
In contrast, the growth rate in bans to households, which had already begun to
slow in 1988, fell from 9.6% to 7.9% in 1990. This downturn chiefly concerned
cash advances to individuals, which have been granted more stringently because
of the risk of overindebtedness. Housing bans were affected to a lesser extent,
their decline matching that of residential investment.
Credit institutions exposed to keen competition and a higher cost of funds
Amid these developments, credit institutions achieved a relative improvement in
their net lending, which is recorded excluding provisions in the national accounts.
The upturn was mainly due to the continued brisk growth of billed services and to
a slight recovery in loan spreads, the latter movement being linked to a rise of
about half a point in the medium level of short-tenu rates over 1989.
Although new lending continued to grow at a robust pace, credit institution
results were adversely affected, as in 1989, by two factors: first, a stiff
competition for market share; second, an increase in the average cost of funds due
to the steady substitution ;n bank liabilities of instruments bearing money-market
yields for low-interest-bearing or non-interest-bearing deposits.
The most typical feature of this change is the massive increase of certificate of
deposit issues by credit institutions, which totaled FF325 billion in 1990 against
FF180 billion in 1989. These instruments are intended to finance new lending and
to provide suitable investment vehicles for the many short-term mutual funds
managed by the banking system.
Conversely, the financial institutions significantly reduced their new bond issues
owing to the bond markets sluggish performance and in the hope of a fall in
long-term interest rates.
Stabilization of the rate of compulsory levies,
while public spending outpaces GDP
The fallback in tax revenues and the special cancellation of less developed
country debt drove up general government net borrowing, excluding the foreignexchange stabilization fund (FSC). The government borrowing requirement came
to 1.6% of GDP, while compulsory levies remained stable. Central government
net borrowing rose as well, reaching FFI21 billion excluding the FSC (table m
and chart @ ).
FFbn
General
government net
borrowing/
lending1
1989
1990
- 105.7
- 103.7
- 125.6
- 121.0
14.9
- 9.2
24.6
11.8
- 9.4
15.1
- 73.2
- 103.5
Central government
including FSC'
excluding FSC
Central government agencies
Local government
Social-security funds
Total general government agencies
(excluding FSC)
I. FSC: Fonds de Stabilisation des Changes (foreign-exchange stabilization fund).
Source:
® Net borrowing/
lending by
institutional sector
FI-bn
150
100
50
-50
-100
-150
1987
1988
1989
1990
Lj Non-financial enterprises
•
Households
• Financial institutions and insurance companies
[~ Government
M Total France
The public spending/GDP ratio, which fell 0.9 points in 1989, rose 0.6 points in
1990. The increase stemmed mainly from the high level of capital transfers,
social benefit transfer payments, and interest payments. Central government
intermediate consumption rebounded sharply after its 1989 decline. On the other
hand, the 4.9% increase in payroll expenses was comparable to that of 1989.
Investment expenditure continued to grow faster than GDP.
Further reduction in the budget deficit
Excluding the FSC, the French central government budget deficit reached FF93.4
billion for 1990, shrinking to 1.4 points of GDP from 1.6 in 1989 and 2.0 in 1988.
As in 1989, because of the deficit reduction and the debt mechanism, interest
payments (FF130 billion) greatly outweighed the total deficit, leaving a large
"primai y" surplus.
Nevertheless, the ratio of public debt to GDP moved up from 26.4% to 27.6%.
This new increase resulted from the persistence of a sizable differential between
the effective interest rate on the debt (8.0%) and the nominal growth rate of GDP
(5.7%). The self-sustaining debt mechanism, set in motion 1984, is therefore still
at work.
Higher social security contribution rates offset by a fall in the taxation rate
The overall rate of compulsory levies held steady in 1990 at 43.8% of GDP. This
relative stability reflects two contradictory phenomena. In 1990, the government
implemented further cuts in corporate income tax, VAT, and oil-product taxes.
This policy, combined with a one-time reduction in levies for the EEC, caused
the taxation rate to dip from 24.6% to 24.4% of GDP. On the other hand, as
nominal gross wages grew faster than GDP, the rate of social security
contributions edged up from 19.2% to 19.4% of GDP—despite the lowering of
rates for family-benefits and industrial-accident insurance contributions.
Since 1987, the distribution of compulsory levies between tax levies and socialsecurity contributions has been shifting toward the latter (chart 0).
Net lending by social security funds remained positive for the fourth consecutive
year (table ©). Its downturn in 1990 was primarily due to the "régime général,"
the main health-insurance scheme for wage and salary earners.
Q
Taxes and other
compulsory levies
% ofGDP
46
Social-security contributions
45
44
43
42
4/
Taxes
26
25
24
23
20
Total compulsory Ievies
/9
18
80 8/ 82
83 84 85 86 87
Sou rce: Comptes de la Nation 1990, Insee
88 89
90
FF bn
Social security schentes:
of which:
"General,schetne"(wage
and salary earners)
Specialfrn ds
Unemployinent
compensation schemes
SClle,nes.çl)eelftc to certain
public-nectar items
Non-wage and nonsalarv
earners schenes
Agricultural-sector sche,ne
Organizations
administered by social
insurance fonds
Total social security funds
® Net lending by
1987
1988
1989
1990
17.1
18.0
30.0
19.2
- 2.8
0.0
- 3.8
0.2
- 2.7
- 0.1
- 9.9
0.0
2.8
7.5
14.8
4.4
12.9
8.0
12.8
18.7
- 0.9
5.1
5.5
0.6
- 1.6
- 0.2
-7.0
10.1
12.4
-5.4
24.6
15.1
-5.6
6.8
social security
funds
6.2
-4.1
The international setting
Most OECD countries were also hit by an economic slowdown. The United
States and Britain posted a growth rate of less than 1%. Unemployment rose as a
result, while inflationary pressures gathered strength in most economies. In 1990,
Europe was subjected to conflicting forces that combined to depress economic
activity. The swelling of the German budget deficit-linked to the effects of
reunification and to personal-tax cuts-had an expansionary effect on western
Germany and its partners. This stimulus is estimated to have driven up GDP by
approximately half a point. Conversely, the dollars steep decline against
European currencies helped to "export" the U.S. slowdown. The economic
downturn was particularly visible in southern European countries: in Spain, it was
a year-long phenomenoa, while in Italy it was first observed in the second
quarter.
This general slowdown was produced by two concurrent developments. The first
was the ending of the long expansionary phase in which the industrial economies
had been operating since 1982. The second and more specific event was the
disturbance created by the Gulf crisis-whose effects were, however, limited. In
the biggest industrial countries, the impact on consumer prices of a $5-per-barrel
rise in the oil price is estimated at slightly under half a point. In the Anglophone
economies, inflation was already accelerating before the rise. In the U.S., the core
rate of inflation-that is, stripping out energy and food prices-climbed from
4.3% to 5.1% between January and July 1990. Despite the economic slowdown,
the index stayed at 5.2% at year-end, notably on account of the service industries'
inertia relative to disinflation (table © ). In Britain, the underlying rate of
inflation, which excludes mortgage interest and local taxes ("rates"), also
accelerated before the oil-price rise.
% change on previous year
Consumer
prices in France
and other
countries
France
Germany]
Britain
Italy
Belgium
Netherlands
Spain
United States
Canada
Japan
Composite index of
France's partners 2
EEC 12 index
(including France)
1988
1989
1990
3.1
1.8
6.8
5.5
1.9
1.2
5.8
4.4
4.1l
1.0
3.6
3.0
7.7
6.5
3.6
1.3
6.9
4.6
5.2
2.6
3.4
2.8
9.3
6.4
3.5
2.6
6.5
6.1
5.0
3.8
3.6
4.7
5.0
4.4
5.2
5.7
I. West Germany to September 1990; unified Gernany thereafter.
2. Germany, Italy, Britain, Belgium, Nctherlands, Spain, United States.
The price index for these countries is obtained by weighting their national indexes by total French trade
(imports + exports) with the countries in ye:us n-2 and n-3.
Source: Insee, 1990
In Japan, where prices accelerated as well, the oil shock does flot seem to have
been a major factor, since it was almost entirely offset by the yens rise against the
dollar.
In Germany, despite monetary unification and robust growth, inflation remained
under control owing to the marks appreciation vis-à-vis the dollar, the effect of
indirect taxation, and the fall in farm prices.
Monetary policies were marked by the cyclical lag: the tightening in Japan and
Germany contrasted with the easing in the U.S., later followed by Britain.
Original 2-volume French edition of
Coping with global uncertainties
Volume 1: 1990: Lafrance à l'épreuve des turbulences mondiales
(paperback, 16 x 24 cm, 330 pp.)
FF 160
• French economic performance in 1990, analyzed from a
medium-term perspective and in its international context
• Detailed comparative analysis on French and German
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• 61 notes with charts and tables on 1989-90
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• Chronology of the year's main economic events in
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Volume 2: Comptes et indicateurs économiques
(paperback, 21 x 29.7 cm, 376 pp.)
FF 150
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INSTI1Ui NATIUNAE TARIF 1991
UE L STAIFIR
ET UES ÉTUUES
ECUNUMIQUES
LES PUBLICATIONS
LA
CONJONCTURE
L' I NFORMATION
SUR L'INFORMATION
TENDANCES DE LA CONJONCTURE
BLOC-NOTES
jon ctu l: lesua n tit tifsj
des enquêtes de conjoncture, les indicateurs conjoncturels quantitatifs 1600 séries)
Cahier 2 vingt années de la vie économique française
retracées sous forme de graphiques à partir des données
des comptes nationaux trimestriels.
de l'observatoire économique de Paris
:
:
Pou, mieux connaître l'information statistique, des repères documentaires sur les problèmes économiques du rrmcmiieii I.
Abonnement 1 an : (11 numéros)
France : 140 F - Etranger : 175 F - Etranger avion : 285 F
Abonnement 1 ae : 8 numéros + suppléments
France : 593F- Etranger : 741 F - Etranger avion : 821 F
l'abonnement à TENDANCES DE LA CONJONCTURE
comprend la NOTE DE CONJONCTURE
INSEE INFOS
INFORMATIONS RAPIDES
Cha que mois, sous forme de brèves, une vitrine des produits de diffesion de l'INSEE.
Dans les meilleurs délais, la mise à jour de l'information
conjoncturelle.
Abonnement gratuit
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Etrangeravion:2263F
INSEE NEWS, LA CARTA DEL INSEE,
LA LETTRE DE L'INSEE
BULLETIN MENSUEL DE STATISTIQUE
A destination des lecteurs étrangers, en anglais, en espagnol et ee fr;mcals, une chronique bi-annuelle des pri cip:iux titres et travaux de
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Cinq mille séries hebdomadaires, mensuelles et trimestrielles concernant l'ensemble de la vie économique et sociale.
U
Abonnement 1 an : 112 numéros)
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Étranger avion : 496 F
Edition sur microfiche : France : 154 F - Etranger : 193 F
Étranger avion: 313 F
Abonnement gratuit
COURRIER DES STATISTIQUES
Quatre fois par an, une
français.
NOTE DE CONJONCTURE
France : 114 F - Étranger : 143 F - Étranger avion : 203 F
Une analyse de la situation otites perspective de l'économie française.
Abonnement
ued'ensembledelamcdr,.ystèmestatistique
:
1 an (3 numéros + 2 points conjoncturels!
SCRIBECO
NOTE DE CONJONCTURE INTERNATIONALE
Une revue bibliographique reflet du fonds documentaire de l'INSEE.
Le panorama de la conjoncture mondiale présenté par la Direction de
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France
Abonnement 1 an : (3 numéros!
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:
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CONJONCTURE IN FRANCE
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LA CONJONCTURE
TENDANCES DE LA CONJONCTURE .................. .. ... I.
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NOTE DE CONJONCTURE
........ .. .. .. .. ... .. .. ... I;
NOTE DE CO NJON CTURE INTER N ATIONALE ... .. ....... .. ... I.
CONJONCTURE IN FRANCE
.. .. ..... .. .. .. ....... .. ...
L'INFORMATION SUR L'INFORMATION
BLOC NOTES DE L'OBSERVATOIRE ÉCONOMIQUE DE PARIS .... I
INSEE INFOS ............ .. .. ..... .. .. .. ... .. .. .. .. ... Il
INSEE NEWS .....
.......
..... .. .. ......... ..... IJ
LA CARTA DEL INSEE ....... ... .... .. .. .. ... .. ......... I.
7
LA LETTRE DE L'INSEE ........... .. .. .. .. ... .. ......... Il
COURRIER DES STATISTIQUES ........................... I
SCRIBECO
............ ................... .. ... .. .... I!
BULLETIN BIBLIOGRAPHIQUE .... .. .. .. .. ..... .. ....... .. Il
Je souhaite recevoir le catalogue des publications de l'INSEE
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ET DES ÉTUDES
ÉCDNUMIDUES
TARIF 1991
LES PUBLICATIONS
LES PÉRIODIQUES
INSEE PREMIERE
INSEE MÉTHODES
En 4 pages, la primeur des données et conclusions
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sur les thèmes qui font l'actualité.
La méthodologie des travaux de l'INSEE et les modèles,
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l.
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ÉCONOMIE ET STATISTIQUE
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En moins de 100 pages, une présentation des enquêtes de
l'INSEE : résultats, commentaires, compléments
méthodologiques et bibliographiques,
Abonnement 1 an (11 numéros)
Édition sur papier : France : 390 F - Étranger : 488 F
Abon nement
anc : 6 des thèmes,
numéros/
Fr
Franco : 650 F - Étrangerr : 812 F
INSEE RÉSULTATS
ANNALES D'ECONOMIE ET DE STATISTIQUE
Les données détaillées des enquêtes et opérations
statistiques de l'INSEE.
L'ensemble INSEE CADRAGE et INSEE RÉSULTATS
est articulé en 5 thèmes : • Économie générale
Démographie-société •Consommation-modes de vie
• Système
Système productif
es' •• nner à revenus.
Il est possible de s'abonner à un, plusieurs ou tous les thèmes.
®
Abonnement INSEE CADRAGE + INSEE RÉSULTATS
Économie générale (20 numéros)
Fra
1 300 F Étranger 1 625 F Etraegee avion : 1 875 F
Démographie-Société (7 numéros)
45 F Et ranger . 570 F Et rang
Fra
Des travaux originaux de recherche théorique ou
appliquée dans les domaines de l'économie, de
l'économétrie et de la statistique.
Abonnes est 1 an (4 numéros)
Édition sur papier : France : 380E- Étranger : 475 F
Pour les particuliers : Abonnement 1 an (4 numéros)
France : 139 F - Étranger : 174 F
__
o : 657F____
3615
ou
.
Consommation-Modes de vie (8 numéros)
France: 520 F - Étranger : 650 F - Étranger avion r 750 F
S yst ème 62F
5 nu m éro s)
Franco:1
ed
Étravion
ang er 2030E- Etrangee
7Code
~
: 2 343 F
I
Emploi revenus (20 numéros)
France r 1 300 F Étranger 1 625 F - Et ranger avion : 1 875 F
Ensemble des 5 thèmes l80 nu éros )
ULTA
A bonn : 5 et o F - ic r fiche: b 500 F - Etg
®
l ÿdi
Abonnement sur m ic rofiches INSEE RÉSULTATS SEUL
(ensemble des thèmes)
Fr»nie '2 .?no F - Ftrannee 2 R75 F - Ftra T ovins .? 75(1 F
' pour l'étranger libellé en FF.
(Total des abonnements) à l'ordre de l'Insee :
Date :
Signature :
wrsl
~m L ne t
.
IWvr
rfien
^'~o
.._..._..__.,.`..^'
BULLETIN D'ABONNEMENT
A retourner à : INSEE - CNGP BP 2718 80027 AMIENS Cedex
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Société
Activité
Ci-joint un chèque de ..................... FF*
SLE
TOUS LES INDICES
i 7 500 F
Veuillez noter mon abonnement aux publications suivantes
INSEE PREMIÈRE
...
.. .. .... ... .... ..... Il
INSEE CADRAGE (ensemble des thèmes) .................... ii
INSEE CADRAGE + INSEE RÉSULTATS par thèmes: .. .... ... .. I1
- Économie générale .............. .. .. .... ... .... ... .. LI
- Démographie - Société ....... ...... ...... ... .... ... .. L1
- Consommation - Modes de vie....................
i
- Système productif .... ... .... .. .... ............. ..... Il
- Emploi -revenus ....... .. .. .. .... ............. ... .. I.l
- Tous thèmes ..... ................ ......... .....
IJ
INSEE RÉSULTATS Isur microfiches, tous thèmes).........
. U
ÉCONOMIE ET STATISTIQUE .. .. .. .... .. ......... .. ... .. ❑
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r~ ,C
361
Ii 67~
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SEFE - 1 EiL
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BP 3196 - 69401 LYON
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formations 78.63.22.02 et 03.
r.
voir - ~g~i=;.
Re-- -gin '
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).M.
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Reproduction d'après documents fournis - Imprimerie Nationale - 1 170650 T 84
m
The French econoiny—litre that of the other industriel nations except
Germany and Japan — slowed in 1990. French gross domestic product rose
by only 2.6 % compared with 4 c/ in 1988 and 1989.
Investment and exports, the engines of earlier growth, were particularly
affected.
On the positive ride, inflation stayed on a downward course, while real
household income climbed and the household saving rate continued tu
recover.
Unemployment, however, remained the major imbalance despite the further
vise in employment during the year.
This booklet, specially prepared for English-speaking readers, provides a
convenient summary of the year-in-review section of the original 1990
issued by Insee on behalf of the
French government.
Rapport sur les comptes de la Nation,
782110 659514
ISSN 1140-5252 / ISBN 2-1 1-06595 1-3 / RAPCNA 90 / Price FF 30

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