Abstract
Although economic performance has remained good, difficulties in building consensus for institutional reform have caused an ill-affordable hiatus in economic policymaking. Robust economic activity absorbed a growing labor force and allowed the unemployment rate to decline continuously. Low-income groups are being disproportionately affected by the food and energy price increases, triggering a necessary increase in targeted income support. The authorities agreed that various indicators suggest that the current level of the real effective exchange rate is broadly appropriate.
This supplement to the staff report for the 2007 Article IV consultation with Belgium provides an update on the staff’s revised economic outlook, recent developments in financial markets, and the 2008 budget proposal. A fiscal ROSC is being issued separately in the context of this Article IV consultation. The information does not alter the thrust of the staff appraisal.
Summary
Growth is forecast to dip to 1.4 percent in 2008, somewhat lower than anticipated in the staff report due to a further weakening of the global environment. Headline inflation has risen more than expected in January, given higher oil and food prices. The financial system has absorbed further write-downs linked to the ongoing financial turmoil. The government has reached agreement on balancing the 2008 general government budget.
Output and inflation
1. Staff projects a deceleration of GDP growth to 1.4 percent in 2008, from 1.6 percent growth in the Staff Report (Table 1). The revision is driven by slower growth in the U.S. and Europe and reflects broadly evenhanded reductions in growth among Belgium’s main economic partners. While consumer and business confidence remained strong in January, encouraged by continued credit supply, inflation is higher and the impact of the global financial market turmoil is expected to be larger than envisaged earlier. In addition, significant downside risks remain, related to the international environment and financial turmoil.
Financial sector
2. The financial sector disclosed additional subprime-related losses. Recent volatility in equity prices as well as a widening of credit default spreads indicates continuing market concerns about asset valuations and their implications for banks’ earnings and capital. Credit default swap spreads have increased sharply for all Belgian banks, in line with those for banks in other euro area countries, and perhaps also related to exposure to emerging Europe whose vulnerabilities have risen. Fortis, Belgium’s largest bank, reported a 45 percent decline in Q4 profits and has further shored up its capital. While Moody’s reaffirmed the AAA rating of Dexia’s U.S bond insurance unit, FSA, Dexia’s CDS spreads continued to increase. If they remain high or widen further, additional accounting impacts on Dexia’s first quarter results may be expected.
2008 budget
3. The authorities agreed on balancing the 2008 general government budget. The federal budget frees up €340 million (0.1 percentage point of GDP) for well-targeted initiatives to support purchasing power, notably through an increase in small pensions and a tax reduction for low-income workers. At the same time, a special tax for power companies, the sale of vacant government-owned buildings, and increased efforts to reduce tax fraud are expected to boost revenues. Regional authorities have agreed to aim for a surplus of 0.2 percent of GDP in 2008. Discussions on the economic program for the follow up full-fledged federal government—which is to take office before end-March—continue and will be reflected in the new budget. Achieving a balanced budget would imply essentially no structural adjustment on the basis of the authorities’ macroeconomic assumptions. The budget agreement does not materially alter the staff’s appraisal, though the recourse to one-off measures (albeit on an admittedly very limited scale, slightly less than 0.1 percent of GDP) reduces somewhat the quality of the underlying adjustment (Text Table 1 and Table 2).
Belgium: General Government Fiscal Indicators, 2003-2009
(In percent of GDP, unless otherwise indicated)
Based on unchanged policy assumption.
Assumes Eurostat’s treatment of the national railway company debt transfer in 2005.
Belgium: General Government Fiscal Indicators, 2003-2009
(In percent of GDP, unless otherwise indicated)
| Est. | Proj. 1/ | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||
| General government balance 2/ | 0.0 | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | ||
| Nonstructural measures | 1.2 | 0.8 | -2.0 | 0.7 | -0.1 | 0.1 | 0.0 | ||
| Structural balance | -1.0 | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | ||
| Interest charges | 5.3 | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | ||
| Structural primary balance | 4.3 | 4.2 | 4.5 | 3.8 | 3.7 | 3.6 | 3.6 | ||
| Change in structural balance | -0.8 | 0.5 | 0.9 | -0.5 | 0.0 | 0.0 | 0.0 | ||
| Public debt 2/ | 98.7 | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | ||
| Memorandum items: | |||||||||
| Real primary spending growth (in percent) 2/ | 4.9 | -0.2 | 8.9 | -3.7 | 3.7 | 1.7 | 1.8 | ||
| Real GDP growth | 1.0 | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | ||
Based on unchanged policy assumption.
Assumes Eurostat’s treatment of the national railway company debt transfer in 2005.
Belgium: General Government Fiscal Indicators, 2003-2009
(In percent of GDP, unless otherwise indicated)
| Est. | Proj. 1/ | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||
| General government balance 2/ | 0.0 | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | ||
| Nonstructural measures | 1.2 | 0.8 | -2.0 | 0.7 | -0.1 | 0.1 | 0.0 | ||
| Structural balance | -1.0 | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | ||
| Interest charges | 5.3 | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | ||
| Structural primary balance | 4.3 | 4.2 | 4.5 | 3.8 | 3.7 | 3.6 | 3.6 | ||
| Change in structural balance | -0.8 | 0.5 | 0.9 | -0.5 | 0.0 | 0.0 | 0.0 | ||
| Public debt 2/ | 98.7 | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | ||
| Memorandum items: | |||||||||
| Real primary spending growth (in percent) 2/ | 4.9 | -0.2 | 8.9 | -3.7 | 3.7 | 1.7 | 1.8 | ||
| Real GDP growth | 1.0 | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | ||
Based on unchanged policy assumption.
Assumes Eurostat’s treatment of the national railway company debt transfer in 2005.
Fiscal ROSC
4. Belgium broadly meets, and in several areas exceeds, the requirements of the fiscal transparency code. Budget formulation is supported by medium-term macroeconomic forecasts and clearly formulated medium-term fiscal policy goals. On the expenditure side, there is room to clarify objectives and targets to help gear decision-making toward the medium term. More information could be included in the budget on tax expenditures and fiscal risks, while institutional arrangements for fiscal policy coordination could be strengthened. A detailed assessment is presented in the accompanying Report on The Observance of Standards and Codes: Fiscal Transparency Module.
Belgium: Main Economic Indicators, 2003-09
(Percentage change from previous year; unless otherwise indicated)
Contribution to growth.
Percent of the labor force.
Based on national accounts data, for economy-wide.
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat.
Excludes effect of one-off measures, including the restructuring of the national railway company in 2005.
Based on relative unit labor costs in manufacturing.
Belgium: Main Economic Indicators, 2003-09
(Percentage change from previous year; unless otherwise indicated)
| Est. | Proj | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||
| Demand and output (in real terms) | |||||||||
| GDP | 1.0 | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | ||
| Private consumption | 0.7 | 1.4 | 1.4 | 2.1 | 2.5 | 1.6 | 1.2 | ||
| Public consumption | 2.1 | 1.8 | -0.2 | 0.0 | 1.8 | 2.3 | 2.0 | ||
| Gross fixed investment | -0.3 | 7.5 | 6.7 | 4.2 | 4.9 | 1.4 | 1.1 | ||
| Of which: enterprise investment | -1.8 | 7.4 | 4.6 | 3.9 | 5.1 | 1.9 | 1.5 | ||
| Stockbuilding 1/ | 0.0 | 0.2 | 0.2 | 0.8 | 0.1 | 0.1 | -0.1 | ||
| Exports of goods and nonfactor services | 2.9 | 6.3 | 4.1 | 2.6 | 4.6 | 4.3 | 3.7 | ||
| Imports of goods and nonfactor services | 2.8 | 6.5 | 4.9 | 2.5 | 5.0 | 5.0 | 3.7 | ||
| Foreign balance 1/ | 0.2 | 0.1 | -0.5 | 0.2 | -0.1 | -0.5 | 0.1 | ||
| Output gap (in percent of potential GDP) | -0.9 | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.2 | ||
| Labor market | |||||||||
| Labor force (national definition) | 1.1 | 1.5 | 1.5 | 1.0 | 0.5 | 0.6 | 0.7 | ||
| Employment (national definition) | 0.1 | 0.7 | 1.2 | 1.3 | 1.6 | 0.4 | -0.2 | ||
| EU harmonized unemployment rate 2/ | 8.2 | 8.4 | 8.4 | 8.2 | 7.5 | 7.6 | 8.3 | ||
| NAIRU 2/ | 7.9 | 7.9 | 7.8 | 7.7 | 7.6 | 7.5 | 7.5 | ||
| Prices, wages, and incomes | |||||||||
| GDP deflator | 1.6 | 2.4 | 2.4 | 2.0 | 1.7 | 2.8 | 1.7 | ||
| Terms of trade (goods) | -0.4 | -0.2 | -0.5 | -0.7 | 0.8 | 0.3 | -0.1 | ||
| Consumer price index (harmonized) | 1.5 | 1.9 | 2.5 | 2.3 | 1.8 | 3.1 | 1.9 | ||
| Labor productivity 3/ | 0.9 | 2.1 | 0.7 | 1.6 | 1.1 | 1.0 | 1.4 | ||
| Interest rates (percent) | |||||||||
| Money market rate (3 month) | 2.3 | 2.1 | 2.2 | 3.1 | 4.3 | … | … | ||
| Government bond yield | 4.2 | 4.2 | 3.4 | 3.8 | 4.3 | … | … | ||
| Saving and investment (in percent of GDP) | |||||||||
| Private saving | 23.3 | 23.7 | 23.8 | 24.9 | 25.6 | 25.3 | 25.3 | ||
| Private investment | 17.1 | 18.1 | 18.6 | 19.1 | 19.3 | 19.1 | 19.0 | ||
| Private saving surplus | 6.1 | 5.6 | 5.2 | 5.8 | 6.3 | 6.1 | 6.3 | ||
| Government saving surplus | -1.7 | -1.7 | -1.8 | -1.7 | -2.1 | -2.2 | -2.5 | ||
| National saving surplus | 4.4 | 3.9 | 3.4 | 4.1 | 4.2 | 3.9 | 3.7 | ||
| Public finances, general government (in percent of GDP) 4/ | |||||||||
| Revenue | 51.1 | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | ||
| Expenditure | 51.1 | 49.2 | 51.6 | 48.4 | 48.7 | 48.7 | 48.9 | ||
| Of which: interest on public debt | 5.3 | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | ||
| Fiscal balance | 0.0 | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | ||
| Primary balance | 5.3 | 4.7 | 1.9 | 4.3 | 3.7 | 3.4 | 2.9 | ||
| Structural balance 5/ | -1.0 | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | ||
| Gross public debt | 98.7 | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | ||
| Balance of payments | |||||||||
| Current account balance (in billions of euros) | 11.4 | 10.2 | 7.9 | 8.4 | 10.7 | 10.0 | 10.0 | ||
| (In percent of GDP) | 4.1 | 3.5 | 2.6 | 2.7 | 3.2 | 2.9 | 2.8 | ||
| Trade balance (in billions of euros) | 9.7 | 7.8 | 4.7 | 2.6 | 3.8 | 4.3 | 5.0 | ||
| (In percent of GDP) | 3.5 | 2.7 | 1.6 | 0.8 | 1.2 | 1.2 | 1.4 | ||
| Exchange rates | |||||||||
| Nominal effective rate (2000=100) | 105.7 | 106.8 | 106.9 | 107.3 | 109.1 | … | … | ||
| Real effective rate (2000=100) 6/ | 110.3 | 111.9 | 113.3 | 115.0 | 117.6 | … | … | ||
Contribution to growth.
Percent of the labor force.
Based on national accounts data, for economy-wide.
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat.
Excludes effect of one-off measures, including the restructuring of the national railway company in 2005.
Based on relative unit labor costs in manufacturing.
Belgium: Main Economic Indicators, 2003-09
(Percentage change from previous year; unless otherwise indicated)
| Est. | Proj | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||
| Demand and output (in real terms) | |||||||||
| GDP | 1.0 | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | ||
| Private consumption | 0.7 | 1.4 | 1.4 | 2.1 | 2.5 | 1.6 | 1.2 | ||
| Public consumption | 2.1 | 1.8 | -0.2 | 0.0 | 1.8 | 2.3 | 2.0 | ||
| Gross fixed investment | -0.3 | 7.5 | 6.7 | 4.2 | 4.9 | 1.4 | 1.1 | ||
| Of which: enterprise investment | -1.8 | 7.4 | 4.6 | 3.9 | 5.1 | 1.9 | 1.5 | ||
| Stockbuilding 1/ | 0.0 | 0.2 | 0.2 | 0.8 | 0.1 | 0.1 | -0.1 | ||
| Exports of goods and nonfactor services | 2.9 | 6.3 | 4.1 | 2.6 | 4.6 | 4.3 | 3.7 | ||
| Imports of goods and nonfactor services | 2.8 | 6.5 | 4.9 | 2.5 | 5.0 | 5.0 | 3.7 | ||
| Foreign balance 1/ | 0.2 | 0.1 | -0.5 | 0.2 | -0.1 | -0.5 | 0.1 | ||
| Output gap (in percent of potential GDP) | -0.9 | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.2 | ||
| Labor market | |||||||||
| Labor force (national definition) | 1.1 | 1.5 | 1.5 | 1.0 | 0.5 | 0.6 | 0.7 | ||
| Employment (national definition) | 0.1 | 0.7 | 1.2 | 1.3 | 1.6 | 0.4 | -0.2 | ||
| EU harmonized unemployment rate 2/ | 8.2 | 8.4 | 8.4 | 8.2 | 7.5 | 7.6 | 8.3 | ||
| NAIRU 2/ | 7.9 | 7.9 | 7.8 | 7.7 | 7.6 | 7.5 | 7.5 | ||
| Prices, wages, and incomes | |||||||||
| GDP deflator | 1.6 | 2.4 | 2.4 | 2.0 | 1.7 | 2.8 | 1.7 | ||
| Terms of trade (goods) | -0.4 | -0.2 | -0.5 | -0.7 | 0.8 | 0.3 | -0.1 | ||
| Consumer price index (harmonized) | 1.5 | 1.9 | 2.5 | 2.3 | 1.8 | 3.1 | 1.9 | ||
| Labor productivity 3/ | 0.9 | 2.1 | 0.7 | 1.6 | 1.1 | 1.0 | 1.4 | ||
| Interest rates (percent) | |||||||||
| Money market rate (3 month) | 2.3 | 2.1 | 2.2 | 3.1 | 4.3 | … | … | ||
| Government bond yield | 4.2 | 4.2 | 3.4 | 3.8 | 4.3 | … | … | ||
| Saving and investment (in percent of GDP) | |||||||||
| Private saving | 23.3 | 23.7 | 23.8 | 24.9 | 25.6 | 25.3 | 25.3 | ||
| Private investment | 17.1 | 18.1 | 18.6 | 19.1 | 19.3 | 19.1 | 19.0 | ||
| Private saving surplus | 6.1 | 5.6 | 5.2 | 5.8 | 6.3 | 6.1 | 6.3 | ||
| Government saving surplus | -1.7 | -1.7 | -1.8 | -1.7 | -2.1 | -2.2 | -2.5 | ||
| National saving surplus | 4.4 | 3.9 | 3.4 | 4.1 | 4.2 | 3.9 | 3.7 | ||
| Public finances, general government (in percent of GDP) 4/ | |||||||||
| Revenue | 51.1 | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | ||
| Expenditure | 51.1 | 49.2 | 51.6 | 48.4 | 48.7 | 48.7 | 48.9 | ||
| Of which: interest on public debt | 5.3 | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | ||
| Fiscal balance | 0.0 | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | ||
| Primary balance | 5.3 | 4.7 | 1.9 | 4.3 | 3.7 | 3.4 | 2.9 | ||
| Structural balance 5/ | -1.0 | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | ||
| Gross public debt | 98.7 | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | ||
| Balance of payments | |||||||||
| Current account balance (in billions of euros) | 11.4 | 10.2 | 7.9 | 8.4 | 10.7 | 10.0 | 10.0 | ||
| (In percent of GDP) | 4.1 | 3.5 | 2.6 | 2.7 | 3.2 | 2.9 | 2.8 | ||
| Trade balance (in billions of euros) | 9.7 | 7.8 | 4.7 | 2.6 | 3.8 | 4.3 | 5.0 | ||
| (In percent of GDP) | 3.5 | 2.7 | 1.6 | 0.8 | 1.2 | 1.2 | 1.4 | ||
| Exchange rates | |||||||||
| Nominal effective rate (2000=100) | 105.7 | 106.8 | 106.9 | 107.3 | 109.1 | … | … | ||
| Real effective rate (2000=100) 6/ | 110.3 | 111.9 | 113.3 | 115.0 | 117.6 | … | … | ||
Contribution to growth.
Percent of the labor force.
Based on national accounts data, for economy-wide.
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat.
Excludes effect of one-off measures, including the restructuring of the national railway company in 2005.
Based on relative unit labor costs in manufacturing.
Belgium: Fiscal Scenarios, 2004-13
(In percent of GDP, unadjusted for working days; unless otherwise indicated)
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat. According to the authorities, the government balance should be 0.1 percent of GDP in 2005 and the public debt 91.5 percent of GDP.
Excludes one-off measures including the restructuring of the national railway company in 2005.
Belgium: Fiscal Scenarios, 2004-13
(In percent of GDP, unadjusted for working days; unless otherwise indicated)
| Est. | Projection | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | ||
| Current policies (A) | |||||||||||
| Revenue | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | 48.1 | 48.0 | 48.0 | 47.9 | |
| Expenditure | 49.2 | 51.6 | 48.4 | 48.7 | 48.7 | 48.9 | 48.3 | 48.1 | 48.0 | 47.8 | |
| Primary expenditure | 44.5 | 47.5 | 44.4 | 44.8 | 45.0 | 45.3 | 44.9 | 44.8 | 44.7 | 44.7 | |
| Interest payments | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | 3.5 | 3.3 | 3.2 | 3.1 | |
| Balance 1/ | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | -0.2 | -0.1 | 0.0 | 0.1 | |
| Structural balance 2/ | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | 0.1 | 0.1 | 0.2 | 0.2 | |
| Change in structural balance | 0.5 | 0.9 | -0.5 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | |
| Primary balance | 4.7 | 1.9 | 4.3 | 3.7 | 3.4 | 2.9 | 3.2 | 3.3 | 3.3 | 3.2 | |
| Structural primary balance 2/ | 4.2 | 4.5 | 3.8 | 3.7 | 3.6 | 3.6 | 3.5 | 3.5 | 3.4 | 3.3 | |
| Debt 1/ | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | 77.1 | 74.3 | 71.6 | 68.9 | |
| Memorandum items (in percent): | |||||||||||
| Real primary expenditure growth 2/ | -0.2 | 8.9 | -3.7 | 3.7 | 1.7 | 1.8 | 1.9 | 1.9 | 1.9 | 1.9 | |
| Output gap | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.2 | -0.3 | -0.1 | 0.0 | 0.0 | |
| GDP growth | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | 2.8 | 2.2 | 2.0 | 2.0 | |
| Staff-recommended scenario (B) | |||||||||||
| Revenue | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | 48.1 | 48.0 | 48.0 | 47.9 | |
| Expenditure | 49.2 | 51.6 | 48.4 | 48.7 | 48.2 | 48.0 | 47.2 | 46.7 | 46.4 | 46.0 | |
| Primary expenditure | 44.5 | 47.5 | 44.4 | 44.8 | 44.5 | 44.4 | 43.8 | 43.5 | 43.3 | 43.1 | |
| Interest payments | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | 3.4 | 3.2 | 3.1 | 2.9 | |
| Balance 1/ | 0.0 | -2.3 | 0.4 | -0.1 | 0.2 | 0.2 | 0.9 | 1.3 | 1.6 | 1.9 | |
| Structural balance 2/ | -0.6 | 0.4 | -0.1 | -0.1 | 0.4 | 0.9 | 1.2 | 1.5 | 1.8 | 2.0 | |
| Change in structural balance | 0.5 | 0.9 | -0.5 | 0.0 | 0.5 | 0.5 | 0.3 | 0.3 | 0.3 | 0.3 | |
| Primary balance | 4.7 | 1.9 | 4.3 | 3.7 | 3.8 | 3.8 | 4.3 | 4.5 | 4.7 | 4.8 | |
| Structural primary balance 2/ | 4.2 | 4.5 | 3.8 | 3.7 | 4.1 | 4.4 | 4.6 | 4.7 | 4.8 | 4.9 | |
| Debt 1/ | 94.4 | 92.2 | 88.1 | 85.1 | 81.5 | 79.0 | 74.6 | 70.5 | 66.4 | 62.1 | |
| Memorandum items (in percent): | |||||||||||
| Real primary expenditure growth 2/ | -0.2 | 8.9 | -3.7 | 3.7 | 0.7 | 0.9 | 1.2 | 1.5 | 1.5 | 1.6 | |
| Output gap | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.3 | -0.4 | -0.2 | -0.1 | -0.1 | |
| GDP growth | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.1 | 2.7 | 2.2 | 2.0 | 2.0 | |
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat. According to the authorities, the government balance should be 0.1 percent of GDP in 2005 and the public debt 91.5 percent of GDP.
Excludes one-off measures including the restructuring of the national railway company in 2005.
Belgium: Fiscal Scenarios, 2004-13
(In percent of GDP, unadjusted for working days; unless otherwise indicated)
| Est. | Projection | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | ||
| Current policies (A) | |||||||||||
| Revenue | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | 48.1 | 48.0 | 48.0 | 47.9 | |
| Expenditure | 49.2 | 51.6 | 48.4 | 48.7 | 48.7 | 48.9 | 48.3 | 48.1 | 48.0 | 47.8 | |
| Primary expenditure | 44.5 | 47.5 | 44.4 | 44.8 | 45.0 | 45.3 | 44.9 | 44.8 | 44.7 | 44.7 | |
| Interest payments | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | 3.5 | 3.3 | 3.2 | 3.1 | |
| Balance 1/ | 0.0 | -2.3 | 0.4 | -0.1 | -0.3 | -0.7 | -0.2 | -0.1 | 0.0 | 0.1 | |
| Structural balance 2/ | -0.6 | 0.4 | -0.1 | -0.1 | 0.0 | 0.0 | 0.1 | 0.1 | 0.2 | 0.2 | |
| Change in structural balance | 0.5 | 0.9 | -0.5 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | |
| Primary balance | 4.7 | 1.9 | 4.3 | 3.7 | 3.4 | 2.9 | 3.2 | 3.3 | 3.3 | 3.2 | |
| Structural primary balance 2/ | 4.2 | 4.5 | 3.8 | 3.7 | 3.6 | 3.6 | 3.5 | 3.5 | 3.4 | 3.3 | |
| Debt 1/ | 94.4 | 92.2 | 88.1 | 85.1 | 82.0 | 80.3 | 77.1 | 74.3 | 71.6 | 68.9 | |
| Memorandum items (in percent): | |||||||||||
| Real primary expenditure growth 2/ | -0.2 | 8.9 | -3.7 | 3.7 | 1.7 | 1.8 | 1.9 | 1.9 | 1.9 | 1.9 | |
| Output gap | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.2 | -0.3 | -0.1 | 0.0 | 0.0 | |
| GDP growth | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.2 | 2.8 | 2.2 | 2.0 | 2.0 | |
| Staff-recommended scenario (B) | |||||||||||
| Revenue | 49.2 | 49.4 | 48.7 | 48.5 | 48.3 | 48.1 | 48.1 | 48.0 | 48.0 | 47.9 | |
| Expenditure | 49.2 | 51.6 | 48.4 | 48.7 | 48.2 | 48.0 | 47.2 | 46.7 | 46.4 | 46.0 | |
| Primary expenditure | 44.5 | 47.5 | 44.4 | 44.8 | 44.5 | 44.4 | 43.8 | 43.5 | 43.3 | 43.1 | |
| Interest payments | 4.7 | 4.2 | 4.0 | 3.8 | 3.7 | 3.6 | 3.4 | 3.2 | 3.1 | 2.9 | |
| Balance 1/ | 0.0 | -2.3 | 0.4 | -0.1 | 0.2 | 0.2 | 0.9 | 1.3 | 1.6 | 1.9 | |
| Structural balance 2/ | -0.6 | 0.4 | -0.1 | -0.1 | 0.4 | 0.9 | 1.2 | 1.5 | 1.8 | 2.0 | |
| Change in structural balance | 0.5 | 0.9 | -0.5 | 0.0 | 0.5 | 0.5 | 0.3 | 0.3 | 0.3 | 0.3 | |
| Primary balance | 4.7 | 1.9 | 4.3 | 3.7 | 3.8 | 3.8 | 4.3 | 4.5 | 4.7 | 4.8 | |
| Structural primary balance 2/ | 4.2 | 4.5 | 3.8 | 3.7 | 4.1 | 4.4 | 4.6 | 4.7 | 4.8 | 4.9 | |
| Debt 1/ | 94.4 | 92.2 | 88.1 | 85.1 | 81.5 | 79.0 | 74.6 | 70.5 | 66.4 | 62.1 | |
| Memorandum items (in percent): | |||||||||||
| Real primary expenditure growth 2/ | -0.2 | 8.9 | -3.7 | 3.7 | 0.7 | 0.9 | 1.2 | 1.5 | 1.5 | 1.6 | |
| Output gap | 0.0 | -0.2 | 0.2 | 0.5 | -0.4 | -1.3 | -0.4 | -0.2 | -0.1 | -0.1 | |
| GDP growth | 2.8 | 2.0 | 2.9 | 2.7 | 1.4 | 1.1 | 2.7 | 2.2 | 2.0 | 2.0 | |
Includes the effect of the restructuring of the national railway company in 2005 as presented by Eurostat. According to the authorities, the government balance should be 0.1 percent of GDP in 2005 and the public debt 91.5 percent of GDP.
Excludes one-off measures including the restructuring of the national railway company in 2005.