Interest rates on government borrowing (as a %)
Interest rates are determined by three factors: the price that lenders charge for postponing consumption, the risk that the borrower may not repay the capital and the fall in the real value of the capital that the lender expects to occur because of inflation during the lifetime of the loan. The interest rates shown here refer to government borrowing and the risk factor is very low. To an important extent the interest rates in this table are driven by the expected rates of inflation. From 1993 long-term interest rates fell for a few years but edged upwards again in 1994/1995. Since then they have been falling steadily in most member countries, but have starting to rise again in 2006. For the 20 member countries in the table for which data are available for the full period from 1993 to 2006, long-term interest rates averaged 6.9% in 1993 but only 3.8% by 2006. For many countries the long-term interest rates recorded in 2005 were historically low. The most striking feature of the table is the reduction in the variance of interest rates among countries. The convergence of long-term interest rates is mostly explained by the increasing integration of financial markets — one aspect of globalization — was particularly pronounced among members of the euro area. Japan and Switzerland are exceptions; their interest rates have remained low but are not converging to the OECD average.
Investment Rates (in gross fixed capital formation as % of GDP)
The total investment rate now averages 21% for the OECD as a whole but rates are substantially higher than this in Korea, Spain, Iceland and Australia and well below 20% in Sweden, United Kingdom, Germany and Norway. For the OECD as a whole, total investment rates are largely unchanged compared to 1993-1995. Particularly sharp falls occurred in Korea, Turkey, Japan and Germany, although in Korea and Japan, investment rates remain well above the OECD average. Total investment rates are now much higher than at the beginning of the 1990s in Ireland, Iceland, Spain and Greece. Investment in machinery and equipment accounts for more than 30% of GFCF in most OECD countries, but investment rates tend to be higher than this in countries with a significant manufacturing base, such as Japan and Switzerland. Over the period shown, the machinery investment rates have fallen in most countries, with particularly sharp falls in Luxembourg, Korea, Ireland and the Netherlands, reflecting higher growth of service activities. Rates grew most in Greece and Iceland. Investment rates in dwellings were particularly high at both the beginning and the end of the period in Norway and Portugal. Ireland, Spain and the Slovak Republic recorded substantial increases over the period, but a number of countries recorded large falls: Turkey, Luxembourg, Germany, Japan and Austria. In the short term, rates of investment in dwellings are sensitive to the business cycle, but, over the long run, investment rates in dwellings reflect population growth rates either through natural growth or immigration, and rising affluence, as is evident for Ireland and Norway.
Migration (as net migration rate per 1,000 inhabitants, annual average 2000-06 or latest available period)
Since 1993 Poland is the only OECD country among the countries shown in the table that has shown negative net migration on a systematic basis. Among countries showing significant increases in population (>0.5% per year) over the 1995-1999 period as a result of international migration are Australia, Canada, Spain, Ireland and Luxembourg. Since then Iceland, Italy and Switzerland have joined the list. Former emigration countries (Ireland, Italy, Portugal and Spain) thus figure prominently among high net migration countries, a trend which is likely to continue. There are nonetheless a number of countries where net migration is currently contributing less to population increase than was the case five to ten years ago. These include Greece, Denmark, the Netherlands and Germany. Those where it is contributing more are the four former emigration countries Ireland, Italy, Portugal and Spain as well as Austria and Switzerland. Indeed, all but eight OECD countries are showing a larger contribution to population growth from net migration in recent years. With the retirement of baby-boomers in the near future, to be replaced by smaller entering labour force cohorts, labour supply needs may well increase and OECD countries see a continuing rise in net migration.
Telephone access (as number of telecommunication access paths per 100 inhabitants in 2005)
Access to communications networks continues to expand in all OECD
countries. At the end of 2005, the total number of fixed and mobile telecommunications paths had increased to more than 1.5 billion. This represented a 8.8% increase over 2004 and an average increase of more than 8.5% in each year since 1997. Growth was not occurring across all access paths. The number of cellular mobile communication subscribers continues to climb. An additional 97 million mobile subscribers were added in 2005. By way of contrast, some segments of the fixed connection market have begun to decrease. The number of fixed access lines decreased in both 2003, 2004 and 2005 and will most likely continue to do so over the coming years. By 2005, all but two OECD countries — Mexico and Turkey — had more than one telecommunications access path per inhabitant and seventeen countries reported more than one and a half per inhabitant, those being Spain, Aust-ria, Australia, Portugal, New Zealand, Germany, the Netherlands, Greece, Norway, Switzerland, Finland, United Kingdom, Denmark, Italy, Sweden, Iceland and Luxembourg.
Among the five non-OECD countries shown here, growth has been spectacular in China, which had less than one access path per 100 inhabitants in 1991 but 60 in 2005. The Russian Federation has now the highest number of paths per 100 inhabitants among these countries. In spite of steady growth over the period, there were only about 13 access paths per 100 inhabitants in India in 2005. A growing trend toward liberalization, and the consequent use of prepaid cards in competitive markets, has helped drive the growth of mobile communications in both OECD and non-OECD countries. In 2004 the total number of cellular mobile users in non-member countries overtook the total for the entire OECD area.
