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Publications

Dans un souci de transparence et d’information, le BFP publie régulièrement les méthodes et résultats de ses travaux. Les publications sont organisées en séries, entre autres, les perspectives, les working papers et planning papers. Certains rapports peuvent également être consultés ici, de même que les bulletins du Short Term Update publiés jusqu’en 2015. Une recherche par thématique, type de publication, auteur et année vous est proposée.

Documents (72)

2009

  • STU 01-09 : Special Topic : The crisis makes Belgian public finances vulnerable 02/03/2009

    In 2008Q4, the financial crisis and the recession faced by the main trading partners took their toll and caused Belgian GDP to fall by 1.3% qoq. According to our February forecast, Belgian economic activity should continue to contract in the course of 2009 and only stabilise in the fourth quarter. As a consequence, Belgian GDP is projected to fall by 1.9% in 2009, after an increase of 1.1% in 2008. Despite the considerable downward revision of Belgian GDP growth for 2009 (last September a positive economic growth of 1.2% was forecast), the uncertainty surrounding this forecast remains exceptionally large and downside risks are likely to be greater than upside risks.

    Belgian exports should fall by 4.6% this year, after an increase of 2.2% in 2008. Imports should decrease less than exports. Despite the drop in oil prices and the appreciation of the euro, the current account balance should remain negative and reach -1.8% of GDP in 2009.

    In 2008, private consumption increased by 0.9%. The negative growth of private consumption in 2009 (-0.4%) is mainly due to historically low consumer confidence and negative wealth effects caused by the drop in asset prices. This should lead to a strong rise in the households' savings rate (up to 15.8%). Worsened demand prospects, the decline in business profitability, falling capacity utilisation rates and tightened lending conditions should exert a drag on business investment in 2009, which should fall by 4.6%. Household investment growth should also turn negative in 2009 (-1.6%), although this contraction will be mitigated somewhat by a temporary VAT reduction. Only public consumption and public investment growth rates are expected to remain positive.

    This year, an average (net) loss of 24 700 jobs should be registered. Job losses in the course of 2009 will be far worse than appears from the annual averages: in 2009Q4, employment should be 59 100 persons lower than in 2008Q4. The harmonised Eurostat unemployment rate (which is based on labour force surveys) is expected to reach 8.2% in 2009, compared to 7.1% in 2008.

    Despite high underlying inflation during the first half of 2009, total inflation, as measured by the yoy increase in the national index of consumer prices, should continue to decrease and even become slightly negative during summer. Only in the second half of this year should the expected oil price increase be reflected in inflation evolution. According to our inflation update of March, average inflation should decline from 4.5% in 2008 to 0.5% in 2009.

    STU 1-09 was finalised on 2 March 2009.

    Short Term Update - Short Term Update 01-09  Publication(en),

2008

  • STU 04-08 : Special Topic : The Belgian financial system at the onset of the crisis 11/12/2008

    The FPB has revised its medium-term outlook for 2008-2013 for the Belgian economy. For the 2008-2010 period, the outlook adopts the international economic scenario provided by the OECD outlook of November 2008. The uncertainty surrounding the results is exceptionally large and downside risks could prove to be greater than upside risks. The greatest downside risks include a longer than expected period of distress on financial markets, and that emerging markets could be hit harder than anticipated.

    The outlook for Belgium shows average GDP growth reaching only 1.5% during the period 2008-2013 (1.9% for the period 2001-2007). This relatively weak performance is largely explained by weak GDP growth in 2008 (1.4%), a fall in economic growth next year (-0.3%) and a limited recovery in 2010. Over the period 2011-2013, GDP growth is expected to stabilise at a rate slightly above 2%, which might not allow the output gap to be completely closed by the end of the projection.

    After dynamic growth in 2007, private consumption expansion should be much more limited in 2008 and 2009. From 2010 onwards, household demand growth should increase gradually and then stabilise at a rate close to 2%. After dynamic growth in 2008, gross fixed capital formation should slightly decrease in 2009, before recovering in 2010 and increasing by 2.4% on average during the 2011-2013 period. Given the unfavourable international environment next year, exports are expected to decrease in 2009. Over the period 2010-2013, exports should increase by 4.4% on average and the contribution of net exports to GDP growth is expected to be slightly positive.

    The worsening of the economic situation should lead to a decrease in employment in 2009. In the medium term, employment should increase again, at a yearly rate reaching 0.8% at the end of the projection. With employment growth heavily affected by the adverse economic situation in the short run and in view of the increase in the labour force, the unemployment rate (broad definition) will soar to 12.9% by 2010 (against 11.9% in 2008), before levelling off at around 13.2% from 2011 onwards. Total administrative unemployment should stand at almost 700,000 persons in 2013 (65,000 persons more than in 2007).

    Under the assumption of unchanged policy, the public accounts are expected to deteriorate markedly, with a net public financing requirement of 1.6% of GDP in 2009, 2.4% in 2010 and up to 2.6% in 2011-2013.

    STU 04-08 was finalised on 11 December 2008.

    Short Term Update - Short Term Update 04-08  STU 04-08(en),

  • STU 03-08 : Special topic : Financial crisis: causes and initial consequences 12/11/2008

    Since mid-September, the financial crisis has entered an exceptionally turbulent new phase. The US and European authorities have had to take extraordinary measures in order to deal with solvency and liquidity problems in the banking sector. As financial conditions are likely to remain difficult, it is obvious that the crisis will have large negative effects on the world economy, although the size of these effects is currently very difficult to grasp due to huge uncertainties concerning the magnitude and the duration of the crisis.

    This uncertainty explains the volatility of most indicators, which makes it currently very difficult to establish credible economic forecasts. The latest short-term forecasts of the FPB were finalised in the first half of September, i.e. before the aggravation of the financial turbulence. According to these forecasts, Belgian GDP growth should amount to 1.6% in 2008 and slow down to 1.2% in 2009. The 2009 government budget is based on this outlook.

    In the light of recent financial sector developments, the latest FPB forecasts should be revised downwards, in line with revisions of economic growth by national and international institutions. In fact, the weakening of economic growth in the course of 2008 will probably be stronger than expected, while the subsequent recovery could take longer to materialise and could lack strength. The channels through which the financial crisis is affecting the real economy are discussed in the Special Topic of this Short Term Update.

    Belgian business and consumer confidence have dropped to their lowest level in more than five years due to weakening economic growth and the financial crisis, which are tending to reinforce one another. Moreover, consumer confidence has suffered from the high number of lay-offs in large Belgian companies. On the other hand, the decline in oil prices and the depreciation of the euro have limited the worsening of sentiment somewhat through their positive effect on households’ purchasing power and export competitiveness.

    Inflation forecasts for 2009 have been revised downwards since September, which is the result of two counteracting factors. In fact, the downward effect of falling oil prices on inflation is partly compensated by the stronger than expected increase in underlying inflation. According to our end-of-October inflation update, the increase in the national index of consumer prices should slow down from 4.6% in 2008 to 1.9% in 2009.

    STU 3-08 was finalised on 31 October 2008.

    Short Term Update - Short Term Update 03-08  STU 03-08(en),

  • STU 02-08 : Special topic : Long-Term Projections of Freight Transport and its Environmental Impact 26/05/2008

    The medium-term outlook for Belgium points towards an average GDP growth rate of 2% for the period 2008-2013. A slowdown is expected for the Belgian economy in 2008 and 2009 (GDP growth of only 1.7%), mainly as a consequence of less dynamic exports and a moderate increase in domestic demand. Belgian GDP growth should accelerate in 2010, thanks to the more favourable international environment and a more dynamic development of domestic demand. From 2011 onwards, Belgian GDP growth should stabilise slightly above its potential (equal to 2% on average). Note that the global economic situation is beset with many uncertainties and, therefore, the outlook is surrounded with considerable risks, especially for the short term.

    The average yearly growth rate for private consumption should reach 1.7% for the period 2008-2013, which is slightly lower than the increase in households’ real disposable income. Purchasing power will be handicapped in 2008 by the high inflation rate (3.8%), but should be underpinned afterwards by employment growth and by higher increases in wage rates and social benefits. Investment growth should reach 2.8% for the period 2008-2013, reflecting the path of business investment growth (supported by business profitability and stable demand prospects after 2009). Growth in exports should reach 5% on average and the contribution of net exports to GDP growth is expected to be 0.1%-points. After an acceleration in 2008, the inflation rate should stabilise slightly below 2% for the period 2009-2013. This rather low inflation rate is mainly due to a moderate increase in imported costs and the persistence of a negative output gap until 2013.

    The expected evolution of employment reflects a relatively favourable macroeconomic environment and persistently modest labour productivity growth (1.2% per year). After a particularly high number of new jobs created in 2007 (70,000), employment growth should remain sustained: about 42,000 units should be created every year during the period 2008-2013. Between 2007 and 2013, manufacturing industrial employment should fall by 35,000 but the number of jobs created in market services should exceed 270,000. Nevertheless, in view of the increase in the labour force (notably explained by incoming migration), the fall in unemployment should be limited to 22,000 persons. The unemployment rate (broad administrative statistics) should fall from 12.6% in 2007 to 11.6% in 2013.

    Under the assumption of constant policy, public accounts are expected to deteriorate markedly, with a net public financing requirement of 0.3% of GDP in 2008, widening to 0.8% of GDP in 2009 and 0.9% of GDP in 2010, before gradually falling to 0.4% by the end of the projection period. Nevertheless, the total public debt to GDP ratio will continue to decline, from 84.8% in 2007 to 70.8% in 2013. [STU 2-08 was finalised on 26 May 2008]

    Short Term Update - Short Term Update 02-08  STU 02-08(en),

  • STU 01-08 : Special Topic : Are Belgian price stability and purchasing power at stake? 21/03/2008

    In line with the international business cycle, qoq GDP growth in Belgium slightly decelerated from 0.7% in the first quarter to 0.5% in the third and the fourth quarter. This year, quarterly growth should be between 0.4% and 0.5%. On a yearly basis, economic growth should slow down from 2.7% in 2007 to 1.9% in 2008. In 2007, the Belgian economy was driven by domestic demand. This year, domestic demand growth should decline markedly. Private consumption growth is expected to weaken as the slowdown in job creation, the more modest increase in wages before indexation, and the acceleration in inflation should all limit the growth of real disposable income. This will also affect housing investment, together with the increased mortgage rates. Business investment growth should also slow down in view of less favourable demand perspectives.

    Export growth should be almost as strong in 2008 as in 2007 despite a slowdown in the growth of the relevant export markets. As a consequence, Belgian exports will keep on losing export market shares, but to a lesser extent. The combination of real import growth exceeding export growth and deteriorating terms of trade should reduce the Belgian current account surplus to 2.5% of GDP in 2008 as compared to 2.9% last year.

    After a net gain of about 68,000 persons in 2007, employment is expected to record an average increase of 46,600 persons this year. As employment will increase faster than the labour force, the broad administrative unemployment rate is expected to decline from 12.7% in 2007 to 12.2% in 2008. The harmonised Eurostat unemployment rate (based on labour force surveys) should fall from 7.6% last year to 7.3% in 2008.

    According to our inflation update of March, the increase in the national index of consumer prices should accelerate to 3.5%, after 1.8% in 2007. This acceleration is mainly due to substantial price increases in energy products and in processed food items (especially cereal and milk products). [STU 1-08 was finalised on 7 March 2008]

    Short Term Update - Short Term Update 01-08  STU 01-08(en),

2007

  • STU 04-07 : Special Topic : Why the medium-low paid benefit less from gross wage increases than the better paid 13/12/2007

    On the basis of its short term economic forecast of September and revised figures for the medium-term international economic environment, the FPB has updated its medium-term outlook 2007-2012. GDP growth should reach 2.1% on average and should be driven by both domestic demand and exports, although the structural loss of export market shares should remain significant: while growth in our potential export markets will reach 6.8% a year on average, exports are expected to record an average annual increase of 5.4%.

    The growth of private consumption (1.8% on average) should be in line with the growth of real disposable income (1.9% on average). Gross fixed capital formation should continue to register sustained growth, attaining an average of 3.1%, mainly reflecting an increase in business investment, but also an acceleration of public investment in view of the local elections of 2012. Inflation (as measured by private consumption deflator growth) should be below 2% on average during the projection period, despite an acceleration in 2008: inflation could even climb to 2.5% next year, according to the latest update of the monthly inflation forecasts of FPB. Limited wage increases (lower than productivity gains), the increase in interest rates, a negative output gap and a moderate increase in imported costs are the main factors accounting for the low inflation rate in the medium term.

    Total employment will increase by more than 40,000 jobs a year on average during the projection period, due to sustained economic growth combined with persistently modest labour productivity (1.4% per year). Due to ongoing structural shifts in the sectoral composition of employment, the manufacturing industry will incur a further loss of 6,000 jobs a year on average, whereas market services should gain 46,000 jobs a year. The employment rate is expected to increase from 62.6% in 2006 to 65.4% in 2012; the fall in the unemployment rate (from 13.8% in 2006 to 11.0% in 2012 -broad definition) should accelerate at the end of the projection period, when baby-boomers will leave the labour force on a massive scale.

    The pace of employment growth should have nearly doubled during the period 2001-2012 compared with the previous decade, despite very similar average economic growth rates for both periods.

    STU 04-07 was finalised on 10 December 2007.

    Short Term Update - Short Term Update 04-07  Publication(en),

  • STU 03-07 : Special Topic : Regional labour market dynamics in Belgium 30/10/2007

    This year, the Belgian economy should register an increase in GDP of 2.7%. In 2008, economic growth is expected to slow down to 2.1%.

    In 2006, Belgian exports grew significantly slower than the relevant export markets. Belgian exporters thus suffered from important losses of market share.  Despite a steady deceleration of growth in the relevant export markets this year and next year, export growth should accelerate somewhat. Consequently, losses of export market shares should be more in line with their historical trend. The current account balance has worsened since 2003 due to the continued rise in oil prices. In 2007 and 2008, the slower increase in oil prices and the appreciation of the euro should limit the decline of the current account balance to 0.1% of GDP per year.

    Domestic demand growth, which is mainly determined by the evolution of private consumption and business investment, should amount to 3.2% this year and 2% next year. In 2007, private consumption will benefit from a strong rise in employment and in property income, while business investment will be stimulated by the high capacity utilisation rate and the ongoing rise in profitability. Next year, private consumption growth should decelerate due to a smaller rise in real disposable income and less favourable demand prospects should weigh on business investment. Domestic employment should increase by, on average, 61,300 persons in 2007 and 44,200 persons in 2008. As the number of jobs is growing faster than the labour force, broad administrative unemployment is expected to decrease by 57,800 persons this year and 20,400 persons next year. The harmonised Eurostat unemployment rate (which is calculated by means of labour force surveys) is expected to fall from 8.2% in 2006 to 7.2% in 2008.

    The evolution of inflation, as measured by the national index of consumer prices, is strongly influenced by the evolution of natural gas prices, which should decline in 2007 and rise substantially in 2008. Consequently, inflation should amount to 1.7% this year and 2.2% next year.

    STU 3-07 was finalised on 5 October 2007.

    Short Term Update - Short Term Update 03-07  Publication(en),

  • STU 02-07 : Special Topic : Generating medium-term budget surpluses to finance the budgetary cost of ageing 05/06/2007

    The medium-term outlook for Belgium points towards an average GDP growth rate of 2.1% during the period 2007-2012, which is slightly higher than the potential rate (2.0%) and similar to the average growth rate of the euro area. This pace of growth follows a strong rebound in 2006 (3.0%), mainly driven by domestic demand, in a context of an improvement in international economic activity.

    The average yearly growth rate for private consumption should reach 1.8% during the period 2007-2012, which is slightly lower than the increase in households’ disposable income. Purchasing power will especially be underpinned by employment growth in 2007 and 2008 and by higher increases in wages and social benefits at the end of the projection period. Investment growth should reach 2.7% during the period 2007-2012, reflecting the path of business investment growth (supported by high business profitability and stable demand prospects), but also an acceleration in public investment at the end of the projection period. Growth in exports should reach 5.7% on average and the contribution of net exports to GDP growth should amount to 0.2%-points. The external surplus, which was strongly reduced between 2002 and 2005, should (slowly) increase from 2007 onwards and attain 3.1% of GDP in 2012. The combination of moderate increases in domestic costs and limited rises in imported costs should allow the inflation rate to remain below 2% in the medium term.

    The expected evolution of employment reflects a favourable macroeconomic context, limited wage increases (mainly at the start of the period) and various measures taken to promote employment. After a particularly high number of new jobs created in 2006 (44,000), employment growth should remain sustained: about 38,000 units should be created every year during the period 2007-2012. Between 2006 and 2012, manufacturing industrial employment should fall by 41,000 units but the number of jobs created in market services should exceed 256,000. As the number of newly created jobs is growing faster than the labour force, the unemployment rate (broad administrative statistics) should fall from 13.9% in 2006 to 12.0% in 2012.

    Under the assumption of constant policy, public accounts are expected to present a net public financing surplus in 2007 (+0.1% of GDP) and to deteriorate in 2008 (-0.5% of GDP). During the following years, the net public financing requirement should gradually decline and the equilibrium should be restored at the end of the projection period, mainly thanks to a decrease in interest charges on the public debt. Consequently, the total public debt to GDP ratio is expected to decline from 87.5% in 2006 to 69.5% in 2012.

    STU 2-07 was finalised on 18 May 2007.

    Short Term Update - Short Term Update 02-07  Publication(en),

  • STU 01-07 : Special Topic : An accuracy assessment of FPB’s medium-term projections 06/03/2007

    In the course of 2006, quarterly economic growth in Belgium slowed down in line with the international business cycle from 0.9% in the first quarter to 0.6% in the last quarter. This year, qoq GDP growth should stabilise around 0.5%. On a yearly basis, economic growth should slow down from 3% in 2006 to 2.2% in 2007.

    In 2006, economic growth was only supported by domestic demand while net exports contributed negatively to it. In 2007, however, both domestic demand and net exports should support GDP growth. Despite the deceleration in quarterly Belgian export growth due to the slowdown of the euro area and the US economy, annual average export growth should rise to 6.5% in 2007 as it benefits from a considerable carry-over from 2006. After several years of decrease, the current account surplus should rise by 0.4% of GDP in 2007, mainly as a result of the decline in oil prices leading to an improvement in the terms of trade. Domestic demand growth should weaken this year, which is essentially due to the evolution of private consumption and public investment. Private consumption growth should be less buoyant than in 2006 as the personal income tax reform then gave its final boost to real disposable income. Public investment rose markedly last year in view of the local elections in October 2006, but should fall by the same extent in 2007.

    After a net gain of about 44,000 persons in 2006, employment is expected to record an average annual rise of 45,600 persons this year. As the number of jobs grows faster than the labour force, the broad administrative unemployment rate is expected to decline from 13.9% in 2006 to 13.5% in 2007. The harmonised Eurostat unemployment rate (based on labour force surveys) should fall from 8.3% in 2006 to 7.9% next year.

    This year, the increase in the national index of consumer prices (NICP) should amount to 1.8%, just as in 2006. It should be noted that the inflation picture in 2006 was blurred by the introduction of a new NICP-basket. The rise of the private consumption deflator, which is not affected by this factor, should decline from 2.3% in 2006 to 1.8% in 2007, mainly due to the decrease in oil prices.

    Short Term Update - Short Term Update 01-07  Publication(en),

2006

  • STU 04-06 : Special Topic : Promoting an innovative economy: the Belgian National Reform Programme 15/12/2006

    In the October update of the FPB medium-term outlook for Belgium, GDP growth reaches an average of 2.3% for the 2006-2011 period. This development will be driven by both domestic demand and exports, although the contribution of net exports to economic growth is expected to be limited. The growth of private consumption (1.9% on average) should be in line with the growth of household disposable income in real terms (2% on average). Gross fixed capital formation should grow by 2.7% (on average). The structural loss of export market shares should remain significant, with exports increasing by 5.5% a year on average, compared with a 6.8% growth in our potential export markets.

    After climbing to 2.4% in 2006 because of high energy prices, inflation (as measured by the private consumption deflator) should fall below 2% in the medium term, mainly because of limited wage growth, the increase in interest rates and moderate rises in prices of imports (notably owing to the decrease in oil prices). Total employment is expected to increase by about 38,500 jobs a year during the 2006-2011 period, despite new job losses in manufacturing. The factors behind this performance are: a relatively favourable macroeconomic context, limited wage increases, a further small reduction in working time and various measures taken to promote employment. Nevertheless, the fall in the unemployment rate is expected to be limited due to the substantial rise in the labour force. However, at the end of the projection period - when baby-boomers will leave the labour force on a massive scale - the growth of the labour force should lose momentum, allowing the decrease in the unemployment rate to accelerate.

    All in all, economic growth should be stronger for the next six years compared to the previous six years, leading to the same average GDP growth rate during the period 2000-2011 as during the period 1990-1999. At the same time, the pace of employment growth should have nearly doubled (yearly 35,000 on average during the same period 2000-2011, against slightly less than 20,000 yearly during the former decade), reflecting a considerable decline in productivity gains.

    This medium term outlook does not take into account the measures taken within the framework of the 2007 budget.

    STU 4-06 was finalised on 11 December 2006.

    Short Term Update - Short Term Update 04-06  Publication(en),

  • STU 03-06 : Special Topic : Simulating the impact of the pension bonus on the financial implications of working longer 20/10/2006

    HEADLINES BELGIAN ECONOMY - OCTOBER 2006

    This year, the Belgian economy should register a GDP growth of 2.7%. In 2007, economic growth should slow down to 2.2%.

    In line with the international economic situation, Belgian export growth should strengthen to 5.4% this year and decrease to 4.9% in 2007. The current account surplus should hardly change. In 2006 this is due to the sharp increase in oil prices, which leads to a deterioration in the terms of trade, whereas in 2007 imports and exports should increase to the same extent, while the terms of trade stabilise.

    Domestic demand should grow at a slower pace as business investment growth weakens somewhat after last year’s substantial catching-up. This is partially compensated for by a strengthening of public expenditure and especially by private consumption. Private consumption growth should accelerate to 2.3% in 2006 and 2% in 2007 (from 1.1% in 2005), thanks to the increase in households’ real disposable income and (at least in 2006) a further drop in the household savings ratio. Domestic employment should increase by on average 41,000 units in 2006 and 45,600 units in 2007. As the number of jobs is growing faster than the labour force, the unemployment rate (large administrative definition) is expected to diminish from 14.3% in 2005 to 13.7% in 2007. Nevertheless, the harmonised Eurostat unemployment rate (based on labour force surveys) should still increase from 8.4% in 2005 to 8.6% in 2006, only to drop to 8.3% next year.

    Headline inflation, as measured by the national index of consumer prices (NICP), should amount to 1.9% in 2006 and 2007 (after 2.8% in 2005). This year, the inflation picture is blurred by the introduction of a new NICP-basket based on the household budget survey of 2004. Measured by the deflator of private consumption, which is not affected by this technical factor, inflation should only drop to 2.4% in 2006 and ease further to 1.9% in 2007. The steady decline in inflation mainly results from the moderate wage cost increase, the appreciation of the euro and the stabilisation of oil prices expected in the course of 2007.

    Short Term Update - Short Term Update 03-06  Publication(en),

  • STU 02-06 : Special Topic - Decomposition analysis of changes in CO2 emissions by the Belgian industries 19/05/2006

    HEADLINES BELGIAN ECONOMY - MAY 2006

    The medium-term outlook for Belgium points towards an average GDP growth rate of 2.2% during the 2006-2011 period, which is slightly higher than potential (2.0%). This pace of growth should follow a slowdown in economic growth in 2005 (1.5%) and a rebound in 2006 (2.4%). Economic growth in Belgium should remain slightly higher than in the euro area, on average.

    Despite moderate wage increases, the average yearly growth rate for private consumption should reach 1.8% during the 2006-2011 period, in particular because of the increase in household disposable income (stimulated especially by reductions in personal income tax and increases in employment and social benefits). Investment growth should reach 2.5% during the 2006-2011 period, mainly reflecting the path of business investment growth, but also an acceleration in public investment at the end of the projection period. Growth in exports should be 5.4% on average and the contribution of net exports to GDP growth is expected to be 0.3%-points. The external surplus, which was strongly reduced between 2002 and 2005, should increase again after 2007 and attain 3.2% of GDP in 2011 (partly as a result of the improvement of the terms of trade). Limited increases in wage costs, the decline in oil prices after 2007 and a negative output gap until the end of the projection period, should allow the inflation rate to remain below 2% in the medium term.

    The expected evolution of employment reflects a favourable macroeconomic context, a limited increase in wage costs and various policy measures. After the net creation of approximately 39,000 and 41,000 jobs in 2005 and 2006 respectively, about 35,000 jobs should be created every year during the 2007-2011 period. Between 2005 and 2011, industrial employment should fall by 30,000 persons, but the number of jobs created in market services should exceed 250,000. Nevertheless, in view of the strong increase in the labour force (mainly in the 50-64 age class) the fall in unemployment will be limited to 38,000 persons. The unemployment rate (broad administrative statistics) should fall from 14.3% in 2005 to 13.1% in 2011.

    Under the assumption of constant policy, public accounts are expected to deteriorate markedly, with a net public financing requirement of 0.3% of GDP appearing in 2006, widening to 1.2% in 2007, before gradually falling to 0.3% by the end of the projection period. Nevertheless, the total public debt to GDP ratio is still expected to decline from 93.9% in 2005 to 78.0% in 2011.

    Short Term Update - Short Term Update 02-06  Publication(en),

  • STU 01-06 : Special Topic - Fiscal Councils, independent forecasts and the budgetary process 27/03/2006

    HEADLINES BELGIAN ECONOMY - MARCH 2006

    In the wake of the economic recovery in Europe, Belgian GDP growth rose gradually from 0.1% in the first quarter to 0.6% in the last quarter of 2005. Quarterly growth should stabilise at 0.6% during the first half of 2006 and remain higher than 0.5% during the second half of the year. On a yearly basis, GDP growth should strengthen from 1.5% last year to 2.2% in 2006.

    This year, net exports as well as domestic demand should contribute positively to economic growth. Due to the European recovery, Belgian export growth will strengthen to 4.7%. The current account surplus, however, will increase very little as a result of the high oil prices, which will lead to a negative evolution in the terms of trade. Domestic demand will grow at a slower pace as business investment will weaken somewhat after a significant catch-up and some exceptional purchases in 2005. This slow-down will be partially compensated for by stronger public expenditure – in consumption and investment – as well as stronger private consumption. Consumer expenditure should accelerate to 1.6% as household disposable income is underpinned by employment growth and personal income tax cuts.

    After a net gain of 38,600 persons last year, employment is expected to record an average annual rise of 41,100 persons in 2006. The number of jobs is growing faster than the labour force, which should slightly reduce the unemployment rate (broad administrative statistics) from 14.3% last year to 14.1% in 2006. The ‘harmonised’ unemployment rate (Eurostat definition) should decline from 8.4% last year to 8.3% in 2006.

    Inflation should fall markedly in 2006 compared to 2005 due to a limited rise in unit wage costs and the fading of the effects of higher oil prices. The inflation picture is somewhat blurred by the persistent deterioration in the terms of trade and by the introduction of a new price index. The private consump-tion deflator should increase by 2.3%, the GDP deflator by 1.9% and the national index of consumer prices by 1.8%.

    Short Term Update - Short Term Update 01-06  Publication(en),

2005

  • STU 04-05 : Special Topic - Transdisciplinarity and the governance of sustainable development 23/12/2005

    HEADLINES BELGIAN ECONOMY - DECEMBER 2005

    The latest update of the FPB medium-term outlook for Belgium shows an average GDP growth reaching 2.1% during the 2005-2010 period. This development can be largely accounted for by both domestic demand and exports, although the contribution of net exports to economic growth is expected to be limited; the current account should continue to decrease until 2006 due to terms of trade losses. Private consumption should grow at a moderate pace during the projection period (1.7% on average), in line with growth of households’ disposable income in real terms. At the same time, gross fixed capital formation (and particularly business investment) should grow at a sustained pace with annual growth reaching 2.9% on average. The structural loss of export market share should be important, with exports increasing by 5% a year on average, compared with a 6.5% growth of our potential export markets.

    Inflation should reach 2.2% on average during the projection period, due to figures close to 3% in 2005 and 2006. The current acceleration is explained by high energy prices and the recent depreciation of the euro against the dollar. However, inflation should be around 2% in 2007 and fall below 2% at the end of the projection period, mainly because of limited wage increases and moderate rises in imported costs. Employment is expected to increase by about 33,000 jobs a year during the 2005-2010 period. This performance can be explained by several factors: a relatively favourable macroeconomic context, limited wage increases, a - although very slow - reduction in working time and various measures taken to promote employment. Nevertheless, the fall in the unemployment rate should be very limited due to a considerable increase in the working population.

    The FPB October update of the medium term outlook for Belgium does not yet take into account the measures taken within the framework of the 2006 budget.

    Short Term Update - Short Term Update 04-05  Publication(en),

  • STU 03-05 : Special Topic - Impacts of tax shifting operations 05/10/2005

    HEADLINES BELGIAN ECONOMY - OCTOBER 2005

    Due to a deceleration in the worldwide business cycle, Belgian economic growth weakened from the fourth quarter of 2004 onwards. Although the high level of oil prices remains an important factor of uncertainty, economic activity should gain momentum during the second half of this year. As a result, GDP growth should fall from 2.6% last year to 1.4% in 2005 and to 2.2% in 2006.

    This year, net exports as well as domestic demand should contribute less to economic growth than in 2004. While Belgian exports suffer from the slowdown in European economic growth, domestic demand is hampered by the poor performance of private and public consumption that is only partially compensated for by an acceleration in investment growth.

    Economic growth in 2006 will mainly depend on domestic demand. Private consumption growth should increase as disposable income is boosted by the personal income tax reform and investment growth should remain strong. Combined with robust export growth, this implies an acceleration of imports, resulting in a zero contribution of net exports to economic growth.

    After a net gain of 23,600 persons last year, employment is expected to record an average annual rise of 28,800 and 30,300 persons in 2005 and 2006 respectively. The unemployment rate should remain stable this year and next year.

    The rise in oil prices has pushed up underlying inflation since the beginning of this year. Together with price increases in oil-related products, this should raise headline inflation from 2.1% in 2004 to 3% in 2005 and 2.9% in 2006.

    Short Term Update - Short Term Update 03-05  Publication(en),

  • STU 02-05 : Special Topic - Market reform in network industries in Belgium 17/05/2005

    The medium-term outlook for Belgium (cut-off date: April 30) points towards an average GDP growth rate of 2.2% during the 2005-2010 period, which is slightly higher than potential (2.1%). This pace of growth is expected to take place after a slowdown in economic growth in 2005 (1.7%) and a rebound in 2006 (2.6%). In both years Belgian economic growth should be slightly higher than in the euro area. Recent information makes the 2005 growth figure highly uncertain, with a significant downward risk.

    Despite moderate wage increases, the average yearly growth rate of private consumption should reach 1.9% during the 2005-2010 period, particularly thanks to the increase in households’ disposable income (stimulated particularly by reductions in personal income tax and the rise in employment). Investment growth should reach 3% on average during the 2005-2010 period, mainly reflecting the increase in business investment but also an acceleration of public investment in 2005 and 2006. Growth in exports should be 5.5% on average and the contribution of net exports to GDP growth is expected to be 0.2%. Limited wage cost increases, lower oil prices as compared to the average level in 2005 and a negative output gap should allow inflation to remain around 1.8% in the medium term.

    The development of employment should reflect the favourable macroeconomic context, the limited increases in wage costs and various policy measures. After the net creation of approximately 29,000 and 21,000 jobs in 2004 and 2005 respectively, about 40,000 jobs should be created every year during the 2006-2010 period. Between 2004 and 2010 industrial employment should fall by 51,000 persons and the number of jobs created in market services should exceed 270,000. Nevertheless, in view of the growth in the labour force (mainly in the 50-64 age group) the fall in unemployment will be limited to 50,000. The unemployment rate (broad administrative statistics) is still increasing in 2005 (from 14.4% to 14.6%), but it will subsequently fall to 12.9% in 2010.

    Under the assumption of unchanged policy, the public accounts are expected to show a clear deterioration, with a net public sector borrowing requirement appearing in 2005 (0.5% of GDP) and widening to 1.5% of GDP in 2006 before gradually declining to 0.7% of GDP by the end of the projection period. Nevertheless, the total public debt to GDP ratio is still in decline, from 95.8% in 2004 to 82.6% in 2010.

    Short Term Update - Short Term Update 02-05  Publication(en),

  • STU 01-05 : Special Topic - Why is Belgian productivity growth declining? 25/03/2005

    In 2004, economic growth in Belgium amounted to 2.7% (GDP at constant prices), which is higher than the euro area average due to the strength of Belgian domestic demand. The economic recovery, triggered by an improvement in the international business climate from mid-2003 onwards, resulted in quarter-on-quarter growth rates between 0.7% and 0.8%, but weakened to 0.4% in the last quarter of 2004.

    Economic growth should gain momentum during the course of this year, which is mainly due to the quarterly profile of exports. In fact, export growth should temporarily weaken during the first half of this year due to lower foreign demand growth and the appreciation of the euro during the last two quarters of 2004, which hampers competitiveness with respect to the other currency areas. Private con-sumption (+1.8%) should increase at a faster pace than purchasing power (+1.4%) for the third con-secutive year. Stimulated by the ongoing recovery of business profitability, low interest rates and gradually improving demand prospects, real business investment growth should strengthen to 3.3% this year. All in all, GDP growth at constant prices should reach 2.2% in 2005. Inflation should re-main rather stable at 2.0%.

    Employment should increase by 34,400 units this year, as compared to 28,600 in 2004. As the labour force should increase at about the same pace in 2005, the unemployment rate should stabilise this year. The employment rate should rise slightly from 61.8% in 2004 to 62.1% in 2005.

    Short Term Update - Short Term Update 01-05  Publication(en),

2004

  • STU 04-04 : Special Topic - Geographic market specialisation and export performance 17/12/2004

    The latest update of the FPB’s medium-term outlook for Belgium shows average GDP growth reaching 2.3% during the 2004-2009 period. This development can be largely accounted for by domestic demand, whereas the role of (net) exports is expected to be more limited. As in 2003, private consumption should evolve in quite a dynamic way during the projection period (1.9% on average), mainly as a result of an expansion of households’ disposable income. At the same time, gross fixed capital formation (and particularly business investment) should recover, with annual growth reaching 3%. The structural loss of export market share should be confirmed with exports increasing by 5.3% a year on average, compared with growth of 6.3% of our potential export markets.

    Inflation should remain slightly below 2% in the medium term, mainly thanks to limited wage increases and moderate rises in imported costs. Employment is expected to increase by about 32,000 jobs a year during the 2005-2009 period. This performance can be explained by several factors: a relatively favourable macroeconomic context, limited wage increases, a reduction in working time and various measures taken to promote employment. At the same time, the working population should rise considerably. As a consequence, despite the creation of many jobs, the fall in the unemployment rate should be very limited.

    The FPB’s October update of the medium term outlook for Belgium does not yet take into account the measures decided within the framework of the 2005 budget.

    Short Term Update - Short Term Update 04-04  Publication(en),

  • STU 03-04 : Special Topic - The effects of an oil price shock on the Belgian economy and public finances 22/10/2004

    The recovery of Belgian GDP started by mid-2003, driven by an improvement of the worldwide business cycle, which persisted during the first half of this year. As a result, GDP growth should accelerate to 2.4% in 2004 and 2.5% in 2005, after a modest increase of only 1.3% in 2003.

    Economic growth in 2004 should be more balanced than in 2003, when it was boosted entirely by domestic demand and net exports contributed negatively. In 2004 net exports should make a positive contribution of 0.4% to economic growth and hence become the driving force behind the pick up in growth. Growth of final national demand should accelerate to 2% this year, from 1.7% in 2003. Next year's economic growth will depend on final national demand. The sharp rise in investment, in particular, will cause an acceleration in national demand of up to 2.6% in 2005. Combined with strong export growth, this implies a speeding up of imports, resulting in a zero contribution of net exports to economic growth next year.

    After a net gain of 2,300 persons in 2003, employment should show an average annual rise of respectively 17,700 and 31,700 persons in 2004 and 2005. The unemployment rate should mark its third consecutive rise this year and only decline marginally in 2005.

    The decrease in underlying inflation from 2% last year, to 1.6% in 2004 and 1.5% in 2005 will be more than compensated for by the recent oil price rises, resulting in headline inflation of 2.1% in 2004 and 2% in 2005.

    Short Term Update - Short Term Update 03-04  Publication(en),

  • STU 02-04 : Special Topic - What is the future for the industrial sector in Belgium? 26/05/2004

    The medium-term outlook for Belgium is pointing towards a GDP growth rate of 2.2% during the 2004-2009 period, which is slightly higher than potential (2.0%). This favourable development is due to both net exports and domestic demand. Private consumption should become more dynamic during the 2005-2009 period, particularly thanks to the increase in households’ disposable income (especially due to tax reforms and increases in employment and social benefits). Investment growth should attain 2.9% during the 2004-2009 period, mainly reflecting the increase in business investment. After ini-tially accelerating in 2004, average export growth should be 5.4% and the contribution of net exports to GDP growth should be 0.2%. Thanks to limited increases in wages and import costs and a negative output gap during the first few years of the projection, the inflation rate will remain below 2% in the medium term.

    The development of employment should reflect the favourable macroeconomic context, the limited in-creases in wage costs and various policy measures. After net losses in 2002 and 2003 and the creation of almost 9,000 jobs in 2004, about 30,000 jobs should be created every year during the 2005-2009 period. Industrial employment should fall by 44,000 persons during the 2004-2009 period and the number of jobs created in market services should exceed 200,000. Nevertheless, given the increase in the labour force (mainly in the 50-64 age class) the number of unemployed will barely decrease at all. The unemployment rate (broad administrative statistics) is still increasing in 2004 (from 14.1% to 14.4%), but will subsequently fall to 13.5% in 2009.

    The public accounts are expected to show a clear deterioration, with a net public sector borrowing re-quirement appearing in 2004 and widening to 1.4% in 2006 before gradually declining to 0.7% by the end of the projection period.

    Short Term Update - Short Term Update 02-04  Publication(en),

  • STU 01-04 : Special Topic - A post-mortem analysis after ten years of Economic Budget 18/03/2004

    In 2003, real economic growth in Belgium amounted to 1.1% thanks to the recovery registered in the second half of the year. World trade growth, which has been remarkably strong since the last few months of 2003, should weaken and the impact of the more expensive euro should make itself more profoundly felt. The pace of exports and GDP growth should then slacken a little by the end of this year. All in all, GDP at constant prices should grow by 2.0% in 2004.

    Last year, solid domestic demand combined with disappointing exports led to a considerable negative contribution of net exports to GDP growth. Thanks to the strong recovery of exports and the weaker growth of domestic demand, that negative contribution should be transformed into a slightly positive contribution this year. Households will only reduce their savings rate when the situation on the labour market becomes noticeably brighter. However, the unemployment rate should only stabilize by the end of 2004, thereby preventing a further fall in the savings rate.

    This year, a gradual increase in employment should be registered. By the end of the year, employment should be 16,500 units higher than the level at the end of last year. Due to the low starting point at the beginning of this year and the fact that the increase is taking place gradually, employment in annual average should exceed last year’s level by only 7,000 units.

    Headline inflation should increase by 1.5% in 2004, as compared with 1.6% last year. On the one hand, underlying inflation should drop significantly as a result of the past appreciation of the euro and the moderate evolution of unit labour costs. On the other hand, the downward impact of the abolition/ reduction of radio and television license fees has been almost exhausted.In 2003, real economic growth in Belgium amounted to 1.1% thanks to the recovery registered in the second half of the year. World trade growth, which has been remarkably strong since the last few months of 2003, should weaken and the impact of the more expensive euro should make itself more profoundly felt. The pace of exports and GDP growth should then slacken a little by the end of this year. All in all, GDP at constant prices should grow by 2.0% in 2004.

    Last year, solid domestic demand combined with disappointing exports led to a considerable negative contribution of net exports to GDP growth. Thanks to the strong recovery of exports and the weaker growth of domestic demand, that negative contribution should be transformed into a slightly positive contribution this year. Households will only reduce their savings rate when the situation on the labour market becomes noticeably brighter. However, the unemployment rate should only stabilize by the end of 2004, thereby preventing a further fall in the savings rate.

    This year, a gradual increase in employment should be registered. By the end of the year, employment should be 16,500 units higher than the level at the end of last year. Due to the low starting point at the beginning of this year and the fact that the increase is taking place gradually, employment in annual average should exceed last year’s level by only 7,000 units.

    Headline inflation should increase by 1.5% in 2004, as compared with 1.6% last year. On the one hand, underlying inflation should drop significantly as a result of the past appreciation of the euro and the moderate evolution of unit labour costs. On the other hand, the downward impact of the abolition/ reduction of radio and television license fees has been almost exhausted.

    Short Term Update - Short Term Update 01-04  Publication(en),

2003

  • STU 04-03 : Special Topic - Personal income tax reform and wage formation in Belgium 04/12/2003

    The latest update of the FPB’s medium-term outlook for Belgium is pointing towards GDP growth of 2.3% on average from 2004 to 2008. This development can be largely accounted for by domestic demand, whereas the role of (net) exports is expected to be more limited. After moderate growth in 2003, the evolution of private consumption should be more dynamic during the 2004-2008 period, particularly thanks to a favourable development in households’ disposable income (stimulated especially by reductions in personal income tax). The growth in gross fixed capital formation should reach an average of 2.9% during the period 2004-2008, notably reflecting the expansion in business investment. Export growth should be 5.1% on average, compared with growth of 5.6% in our potential export markets: the structural loss of export market share should be confirmed.

    Inflation should be below 2% in the medium term, thanks to moderate wage increases compatible with productivity gains, cuts in social security contributions and the extension of production capacity. Employment is expected to show a gradual improvement: an average increase of 34,000 jobs should be seen during the 2004-2008 period. The unemployment rate in a broad sense should decrease from 14.2% by mid-2003 to 12.8% in 2008, a large proportion of the labour expansion being absorbed by growth in the labour force.

    Given the present prospects for future economic growth, assuming no policy change but taking into account the most important measures decided within the framework of the 2004 budget, the financing capacity of public administrations should go into deficit in the medium term (0.5% of GDP in 2008). The goal of a positive financing capacity (0.3% of GDP in 2007) is not expected to be reached without additional budgetary measures. Nevertheless, the total public debt to GDP ratio should continue to fall, going down by about 17 percentage points between 2002 and 2008.

    Short Term Update - Short Term Update 04-03  Publication(en),

  • STU 03-03 : Special Topic - Belgian transport outlook to 2010 17/10/2003

    Both confidence indicators and some hard data now suggest that economic activity in the euro area should register a moderate recovery during the last part of 2003. Even if risks are still present, they are more balanced than a few months ago.

    During the last few months, confidence is rising again in Belgium. GDP growth is forecast to pick up slightly in the second half of the year, and amount to 0.9% in 2003. With a far less dynamic pace than was seen during the previous cyclical recoveries in 1996 and 1999, annual average GDP growth should amount to 1.8% next year.

    This year, as a result of the stronger euro and the weakness of the euro area economy, net exports should make a very negative contribution towards economic growth (-0.9%). Real GDP growth should be exclusively driven by domestic demand (1.8%) as a result of the cutback in personal income tax rates and the improvement of business profitability. Next year, domestic demand should grow at the same pace as this year, but GDP growth should be more balanced.

    A gradual improvement in domestic employment is not expected to take place until the last quarter of 2003. In response to this slowly improving labour market situation in 2004, the household savings rate should not begin to decrease until the second half of 2004. Next year, CPI inflation should be by 1.4%, as compared with 1.6% this year. This fall is inspired by the past appreciation of the euro and the moderate development of unit labour costs.

    Short Term Update - Short Term Update 03-03  Publication(en),

  • STU 02-03 : Special Topic - Estimating potential growth in Belgium 15/06/2003

    Economic activity remained subdued in the euro area in the last quarter of 2002 and early estimates point to a stabilisation in the first quarter of the current year. International organizations are forecasting a gradual but only modest recovery in the course of 2003. In Belgium, GDP growth was higher than in the main neighbouring countries in the last quarter of 2002. This should also be the case in the first quarter of 2003. The FPB leading indicator for Belgium confirms the scenario of a recovery during the course of 2003. Annual GDP growth should nevertheless be only slightly above 1% this year.

    Various risks could jeopardise the recovery in the euro zone: the continuing depreciation of the USD, and a slower recovery of confidence due to the situation in the labour market and/or the stock market. The medium-term outlook for Belgium is pointing towards a GDP growth rate of 2.4% during the 2004-08 period, which is slightly higher than potential (2.1%).This favourable development is due to both net exports and domestic demand. Private consumption should become more dynamic during the 2004-2008 period, particularly thanks to the increase in households’ disposable income (especially due to tax reform). Investment growth should attain 3% during the 2004-08 period, mainly reflecting the increase in business investment. Average export growth should be 5.3% during the same period and the contribution of net exports to GDP growth should be 0.3%. Thanks to limited wage and import cost increases and a negative output gap in the first years of the projection, the inflation rate will remain below 2% in the medium term.

    The development of employment should reflect the favourable macroeconomic context, the limited increases in wage costs and various policy measures. After stagnating in 2003, about 32,000 jobs should be created every year during the 2004-2008 period (as compared with 43,000 jobs created on average during 1996-2002). Industrial employment should fall by 38,000 persons during the 2003-2008 period and the number of jobs created in market services should exceed 200,000. The unemployment rate (including long term unemployment of older workers) is still increasing in 2003 (from 13.3% to 14.0%), but will subsequently fall to 12.9% in 2008. The proportion of active job seekers within broad unemployment will increase, due to recent policy measures aimed at limiting early retirement.

    The public accounts are expected to show a clear deterioration, with a net public administrations borrowing requirement appearing in 2003. Equilibrium is not expected to be reached until the end of the period covered by the forecast.

    Short Term Update - Short Term Update 02-03  Publication(en),

  • STU 01-03 : Special Topic - Reform of network industries in Belgium 10/03/2003

    In the first half of 2002 the world economy seemed to recover from the sharp decline during 2001. This recovery was not, however, confirmed during the second half of the year.

    In this muddled international business climate, the recovery of the Belgian economy is postponed until the second half of 2003. In annual average terms, GDP should grow this year by 1.3%. For the first two quarters of this year, positive but very modest GDP growth is assumed. Growth should be higher during the second half of the year, but clearly not as high as seen in previous economic recoveries in 1996 and 1999. Under these circumstances, the employment rate should fall for the second consecutive year, thus scoring 0.6 points lower than its previous peak in 2001. Consumer price inflation should remain rather stable at around 1.4%.

    As economic agents are at present spellbound by the growing threat of a war in the Middle East, and the outcome of that conflict situation is hard to predict, the uncertainty margin surrounding the international economic context, is of course extremely high.

    Short Term Update - Short Term Update 01-03  Publication(en),

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