Belgium: Staff Report for the 2017 Article IV Consultation—Supplementary Information

International Monetary Fund. European Dept.

doi:10.5089/9781475587630.002.A003

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Belgium: Staff Report for the 2017 Article IV Consultation—Supplementary Information

Author: International Monetary Fund. European Dept.

Publication Date:: 17 Mar 2017

eISBN:: 9781475587630

Language:: English

Keywords:: ISCR; CR; center; report; contribution to growth; estimate in the staff report; General government debt; contribution to GDP growth; revised medium-term projection; Fiscal stance; Global

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Following successful reforms during the government's initial year in office, the year 2016 proved to be more difficult. The terror attacks in Paris and Brussels had a significant, albeit temporary, effect on the economy. The fiscal strategy veered off track, with a sizeable overshoot of the deficit target. Growth prospects for 2017 and beyond are modest, as in other euro area countries. The Belgian labor market remains severely fragmented.

Abstract

This supplement provides information that has become available since the issuance of the staff report on February 23, 2017. The thrust of the staff appraisal is unchanged.

Staff has updated the macroeconomic framework to reflect the release of 2016 data and revised global assumptions. The headline 2016 real GDP growth figure was in line with the estimate in the staff report, although with somewhat weaker consumption growth and stronger (gross) investment growth. The contribution to growth from net exports was in line with earlier projections, though both exports and imports grew more strongly than expected. Staff’s revised medium-term projections (Table 1) are very similar to those reported in the staff report.

Table 1.

Belgium: Selected Economic Indicators, 2013–2022

Sources: Haver Analytics, Belgian authorities, and IMF staff projections.

^¹Contribution to GDP growth.

Table 1.

Belgium: Selected Economic Indicators, 2013–2022

							Projections
				2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
(percentage change from previous period; unless otherwise indicated)
Real economy
	Real GDP			−0.1	1.7	1.5	1.2	1.6	1.5	1.5	1.5	1.5	1.5
		Domestic demand		−0.5	2.3	1.5	0.5	1.5	1.6	1.5	1.6	1.5	1.5
		Private consumption		0.7	0.6	1.1	0.7	1.4	1.5	1.4	1.4	1.4	1.4
		Public consumption		0.1	1.4	0.5	0.2	0.4	0.4	0.7	0.7	0.8	0.8
		Gross fixed investment		−1.5	5.1	2.4	2.1	2.6	2.9	2.4	2.8	2.4	2.6
		Stockbuilding¹		−0.6	0.4	0.3	−0.4	0.0	0.0	0.0	0.0	0.0	0.0
		Foreign balance¹		0.4	−0.5	0.0	0.8	0.2	0.0	0.0	0.0	0.0	0.0
			Exports, goods and services	0.8	5.1	4.3	6.1	4.8	3.9	4.1	4.0	4.0	4.0
			Imports, goods and services	0.3	5.9	4.3	5.3	4.7	4.0	4.1	4.0	4.0	4.1
	Household saving ratio			12.3	12.1	11.7	12.6	12.9	13.0	13.2	13.3	13.3	13.4
	Potential output growth			1.0	1.1	1.1	1.2	1.3	1.4	1.4	1.5	1.5	1.5
	Potential output growth per working age person			0.8	1.0	0.9	0.9	1.0	1.2	1.5	1.5	1.6	1.5
	Output gap (in percent)			−1.6	−1.0	−0.6	−0.6	−0.2	−0.1	0.0	0.1	0.1	0.1
Employment
	Unemployment rate			8.5	8.6	8.5	8.0	7.8	7.6	7.4	7.4	7.3	7.3
	Employment			−0.3	0.4	0.9	1.3	0.9	0.8	0.6	0.4	0.5	0.5
Prices
	Consumer prices			1.2	0.5	0.6	1.8	2.0	1.7	1.7	1.8	2.0	2.0
	GDP deflator			1.2	0.7	0.9	1.6	1.6	1.7	1.7	1.8	2.0	2.0
					(Percent of GDP; unless otherwise indicated)
Public finance
	Revenue			52.7	52.0	51.3	51.0	51.0	50.7	50.4	50.2	50.2	50.2
	Expenditure			55.7	55.1	53.9	53.7	53.1	53.0	52.6	52.6	52.6	52.7
	General government balance			−3.0	−3.1	−2.5	−2.7	−2.1	−2.2	−2.3	−2.4	−2.4	−2.5
		Structural balance		−2.8	−2.8	−2.2	−2.4	−1.9	−2.2	−2.3	−2.4	−2.5	−2.5
		Structural primary balance		0.4	0.4	0.8	0.3	0.5	0.1	0.0	−0.1	0.0	−0.1
		Primary balance		0.3	0.2	0.5	0.0	0.4	0.1	0.0	−0.1	0.0	0.0
	General government debt			105.4	106.5	105.8	105.5	104.3	103.3	102.3	101.4	100.3	99.4
Balance of payments
	Goods and services balance			0.1	0.4	2.3	3.6	2.9	2.5	2.6	2.4	2.4	2.5
	Current account			−0.3	−0.7	0.4	1.0	0.9	1.0	1.4	1.5	1.8	1.9
Exchange rates
	Euro per U.S. dollar, period average			0.8	0.8	0.9	0.9	…	…	…	…	…	…
	NEER, ULC-styled (2005 = 100)			102.2	102.1	97.9	98.9	…	…	…	…	…	…
	REER, ULC-based (2005 = 100)			104.2	104.0	98.3	101.4	…	…	…	…	…	…
Memorandum items
	Nominal GDP (in billions of euros)			391.7	400.8	410.4	422.0	435.6	449.6	464.2	479.8	496.9	514.6
	Population (in millions)			11.2	11.2	11.2	11.3	11.4	11.4	11.5	11.5	11.6	11.7

Sources: Haver Analytics, Belgian authorities, and IMF staff projections.

^¹Contribution to GDP growth.

Table 1.

Belgium: Selected Economic Indicators, 2013–2022

							Projections
				2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
(percentage change from previous period; unless otherwise indicated)
Real economy
	Real GDP			−0.1	1.7	1.5	1.2	1.6	1.5	1.5	1.5	1.5	1.5
		Domestic demand		−0.5	2.3	1.5	0.5	1.5	1.6	1.5	1.6	1.5	1.5
		Private consumption		0.7	0.6	1.1	0.7	1.4	1.5	1.4	1.4	1.4	1.4
		Public consumption		0.1	1.4	0.5	0.2	0.4	0.4	0.7	0.7	0.8	0.8
		Gross fixed investment		−1.5	5.1	2.4	2.1	2.6	2.9	2.4	2.8	2.4	2.6
		Stockbuilding¹		−0.6	0.4	0.3	−0.4	0.0	0.0	0.0	0.0	0.0	0.0
		Foreign balance¹		0.4	−0.5	0.0	0.8	0.2	0.0	0.0	0.0	0.0	0.0
			Exports, goods and services	0.8	5.1	4.3	6.1	4.8	3.9	4.1	4.0	4.0	4.0
			Imports, goods and services	0.3	5.9	4.3	5.3	4.7	4.0	4.1	4.0	4.0	4.1
	Household saving ratio			12.3	12.1	11.7	12.6	12.9	13.0	13.2	13.3	13.3	13.4
	Potential output growth			1.0	1.1	1.1	1.2	1.3	1.4	1.4	1.5	1.5	1.5
	Potential output growth per working age person			0.8	1.0	0.9	0.9	1.0	1.2	1.5	1.5	1.6	1.5
	Output gap (in percent)			−1.6	−1.0	−0.6	−0.6	−0.2	−0.1	0.0	0.1	0.1	0.1
Employment
	Unemployment rate			8.5	8.6	8.5	8.0	7.8	7.6	7.4	7.4	7.3	7.3
	Employment			−0.3	0.4	0.9	1.3	0.9	0.8	0.6	0.4	0.5	0.5
Prices
	Consumer prices			1.2	0.5	0.6	1.8	2.0	1.7	1.7	1.8	2.0	2.0
	GDP deflator			1.2	0.7	0.9	1.6	1.6	1.7	1.7	1.8	2.0	2.0
					(Percent of GDP; unless otherwise indicated)
Public finance
	Revenue			52.7	52.0	51.3	51.0	51.0	50.7	50.4	50.2	50.2	50.2
	Expenditure			55.7	55.1	53.9	53.7	53.1	53.0	52.6	52.6	52.6	52.7
	General government balance			−3.0	−3.1	−2.5	−2.7	−2.1	−2.2	−2.3	−2.4	−2.4	−2.5
		Structural balance		−2.8	−2.8	−2.2	−2.4	−1.9	−2.2	−2.3	−2.4	−2.5	−2.5
		Structural primary balance		0.4	0.4	0.8	0.3	0.5	0.1	0.0	−0.1	0.0	−0.1
		Primary balance		0.3	0.2	0.5	0.0	0.4	0.1	0.0	−0.1	0.0	0.0
	General government debt			105.4	106.5	105.8	105.5	104.3	103.3	102.3	101.4	100.3	99.4
Balance of payments
	Goods and services balance			0.1	0.4	2.3	3.6	2.9	2.5	2.6	2.4	2.4	2.5
	Current account			−0.3	−0.7	0.4	1.0	0.9	1.0	1.4	1.5	1.8	1.9
Exchange rates
	Euro per U.S. dollar, period average			0.8	0.8	0.9	0.9	…	…	…	…	…	…
	NEER, ULC-styled (2005 = 100)			102.2	102.1	97.9	98.9	…	…	…	…	…	…
	REER, ULC-based (2005 = 100)			104.2	104.0	98.3	101.4	…	…	…	…	…	…
Memorandum items
	Nominal GDP (in billions of euros)			391.7	400.8	410.4	422.0	435.6	449.6	464.2	479.8	496.9	514.6
	Population (in millions)			11.2	11.2	11.2	11.3	11.4	11.4	11.5	11.5	11.6	11.7

Sources: Haver Analytics, Belgian authorities, and IMF staff projections.

^¹Contribution to GDP growth.

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Belgium: 2017 Article IV Consultation-Press Release; Staff Report; Supplementary Information

Author: International Monetary Fund. European Dept.

Volume/Issue:: Volume 2017: Issue 069

Publisher:: International Monetary Fund

ISBN:: 9781475587630

ISSN:: 1934-7685

Pages:: 69

DOI:: https://doi.org/10.5089/9781475587630.002

Keywords

Table 1.

Belgium: Selected Economic Indicators, 2013–2022

							Projections
				2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
(percentage change from previous period; unless otherwise indicated)
Real economy
	Real GDP			−0.1	1.7	1.5	1.2	1.6	1.5	1.5	1.5	1.5	1.5
		Domestic demand		−0.5	2.3	1.5	0.5	1.5	1.6	1.5	1.6	1.5	1.5
		Private consumption		0.7	0.6	1.1	0.7	1.4	1.5	1.4	1.4	1.4	1.4
		Public consumption		0.1	1.4	0.5	0.2	0.4	0.4	0.7	0.7	0.8	0.8
		Gross fixed investment		−1.5	5.1	2.4	2.1	2.6	2.9	2.4	2.8	2.4	2.6
		Stockbuilding¹		−0.6	0.4	0.3	−0.4	0.0	0.0	0.0	0.0	0.0	0.0
		Foreign balance¹		0.4	−0.5	0.0	0.8	0.2	0.0	0.0	0.0	0.0	0.0
			Exports, goods and services	0.8	5.1	4.3	6.1	4.8	3.9	4.1	4.0	4.0	4.0
			Imports, goods and services	0.3	5.9	4.3	5.3	4.7	4.0	4.1	4.0	4.0	4.1
	Household saving ratio			12.3	12.1	11.7	12.6	12.9	13.0	13.2	13.3	13.3	13.4
	Potential output growth			1.0	1.1	1.1	1.2	1.3	1.4	1.4	1.5	1.5	1.5
	Potential output growth per working age person			0.8	1.0	0.9	0.9	1.0	1.2	1.5	1.5	1.6	1.5
	Output gap (in percent)			−1.6	−1.0	−0.6	−0.6	−0.2	−0.1	0.0	0.1	0.1	0.1
Employment
	Unemployment rate			8.5	8.6	8.5	8.0	7.8	7.6	7.4	7.4	7.3	7.3
	Employment			−0.3	0.4	0.9	1.3	0.9	0.8	0.6	0.4	0.5	0.5
Prices
	Consumer prices			1.2	0.5	0.6	1.8	2.0	1.7	1.7	1.8	2.0	2.0
	GDP deflator			1.2	0.7	0.9	1.6	1.6	1.7	1.7	1.8	2.0	2.0
					(Percent of GDP; unless otherwise indicated)
Public finance
	Revenue			52.7	52.0	51.3	51.0	51.0	50.7	50.4	50.2	50.2	50.2
	Expenditure			55.7	55.1	53.9	53.7	53.1	53.0	52.6	52.6	52.6	52.7
	General government balance			−3.0	−3.1	−2.5	−2.7	−2.1	−2.2	−2.3	−2.4	−2.4	−2.5
		Structural balance		−2.8	−2.8	−2.2	−2.4	−1.9	−2.2	−2.3	−2.4	−2.5	−2.5
		Structural primary balance		0.4	0.4	0.8	0.3	0.5	0.1	0.0	−0.1	0.0	−0.1
		Primary balance		0.3	0.2	0.5	0.0	0.4	0.1	0.0	−0.1	0.0	0.0
	General government debt			105.4	106.5	105.8	105.5	104.3	103.3	102.3	101.4	100.3	99.4
Balance of payments
	Goods and services balance			0.1	0.4	2.3	3.6	2.9	2.5	2.6	2.4	2.4	2.5
	Current account			−0.3	−0.7	0.4	1.0	0.9	1.0	1.4	1.5	1.8	1.9
Exchange rates
	Euro per U.S. dollar, period average			0.8	0.8	0.9	0.9	…	…	…	…	…	…
	NEER, ULC-styled (2005 = 100)			102.2	102.1	97.9	98.9	…	…	…	…	…	…
	REER, ULC-based (2005 = 100)			104.2	104.0	98.3	101.4	…	…	…	…	…	…
Memorandum items
	Nominal GDP (in billions of euros)			391.7	400.8	410.4	422.0	435.6	449.6	464.2	479.8	496.9	514.6
	Population (in millions)			11.2	11.2	11.2	11.3	11.4	11.4	11.5	11.5	11.6	11.7

Sources: Haver Analytics, Belgian authorities, and IMF staff projections.

^¹Contribution to GDP growth.

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