Short Term Update 01-15 : Special Topic in this issue - A decomposition analysis of Belgium’s world export market share loss between 1995 and 2012 [ Short Term Update 01-15 - 24/03/2015]

Short Term Update (STU) is the quarterly newsletter of the Belgian Federal Planning Bureau. It contains the main conclusions from the publications of the FPB, as well as information on new publications, together with an analysis of the most recent economic indicators.

Headlines Belgian Economy

By the end of March, the FPB published a medium term outlook (2015-2020) that should serve as the macroeconomic input for the Belgian Stability programme and the National Reform Programme (see www.plan.be). That outlook contains a few revisions for 2015 as compared to our short-term forecasts published in February (and described on pages 5-6). A summary of the March forecast for 2015 is provided below.

Following two years of meagre economic growth, Belgian GDP growth accelerated to 1% in 2014 due to a strengthening of both domestic demand and exports. Against the background of the recovery of the European economy (GDP growth in the euro area should accelerate to 1.3% in 2015, following 0.8% in 2014), Belgian economic growth should continue to pick up and reach 1.2% on an annual basis in 2015.

Domestic employment (+0.3% in 2014 and +0.5% in 2015) is not increasing to the same extent as economic activity, as both labour productivity and hours worked per person are catching up. The number of unemployed (broad administrative definition) should decrease only slightly in 2015, which is partly due to the fact that new entrants in an early retirement scheme should from now on remain available for the labour market.

According to our most recent inflation forecasts, finalised at the beginning of March, Belgian inflation, as measured by the national index of consumer prices, should amount to only 0.2% on average in 2015. This is due to the disinflationary impact of the weakness in demand growth in the euro area as well as to the decline in oil prices in dollar terms, which is only partially compensated for by the depreciation of the euro.

The general government's deficit should decrease to 2.7% of GDP in 2015 (from 3.2% of GDP in 2014), driven by consolidation measures at all levels of government.
STU 1-15 was finalised on 24 March 2015.