Strong growth in domestic demand was a keyfeature of the economies of southern European countries in
1986, though the growth is seen slowing this year and next, the
Organisation for Economic Cooperation and Development said.
    In its semi-annual report, the OECD said Portugal's total
domestic demand growth would decline from 7.6 pct last year to
five pct in 1987 and 3.75 pct in 1988 as slower wage growth
restrained private consumption.
    Turkey's economy grew much faster than expected in 1986 and
domestic demand surged 10.5 pct, but this growth was expected
to be halved to five pct next year.
    In Spain, buoyant domestic demand, led by fixed investment,
had been the driving force behind rapid growth in Gross
Domestic Product. Both fixed investment and private consumption
were expected to ease during 1988 but would still remain
strong.
    The OECD forecast that Spanish imports would rise sharply
next year, reflecting strong demand, entry to the European
Community and declining competitiveness.
    In Greece, inflation was forecast to turn downwards
following an increase early this year linked with the
introduction of Value Added Tax and a surge in food prices due
to cold weather.
 REUTER
