The Influence of the 1974 Oil Crisis on Sectoral Growth Rates in the Belgian Economy

Extract

This paper briefly presents and analyses the behaviour of the different sectors of the Belgian economy during the period 1965-1978. Special attention is paid to the influence of the 1974 oil crisis on sectors of the Belgian economy. It is shown that the 1974 shock had different consequences according to the energy components of the sectors.

Measured in 1970 prices, the real production of all Belgian sectors together had an average, annual growth rate of 4.32 % between 1965 and 1978. This 13-year period, however, was marked by an important shock in 1974 and the growth rates over the period 1974-1978 were substantially lower than those observed before 1974.

Although the average growth rate was 5.5% during the period 1965-1978, it was below 2% (1.79%) between 1974 and 1978. This important reduction illustrates the set-back of activity in most sectors and especially in the industrial sector; the average growth rate of industry dropped from 6.81% between 1965 and 1974 to 0.85 % from 1974 to 1978. The energy sector was also affected by the 1974 crisis, only conserving a moderate growth rate of 1.74% during the period 1974-1978 against 6.77% previously. On the contrary, services resisted the crisis better and maintained a growth rate of about 4 % until 1978.