Developments in oil prices and in export markets have weighed on Belgium’s activity but, with these factors becoming more favourable, growth is projected to pick up progressively.
Employment growth is, however, unlikely to be strong enough to reduce the unemployment rate much from the current 8.4%. Headline inflation should fall back almost to the underlying rate of 1.6% by 2007.Further fiscal consolidation measures, focusing on expenditure restraint, should be implemented to build on progress made in moving public finances towards a sustainable path. The government aims to maintain the budget in balance in 2006 and to achieve a small surplus in 2007. Reforms to lower benefit dependence and increase employment rates, especially for older and younger workers, are vital as they reduce the amount of consolidation required for the sustainability of public finances.
Population (000s), 2004 | 10 399 |
Area (000 sq km) | 31 |
Currency | Euro |
GDP (Billion USD), 2004 | 352.3 |
Life expectancy at birth (Women, Men), 2002 | 81.1, 75.1 |
Total labour force (000s), 2004 | 4 561 |
Government type | Constitutional Monarchy |
Indicators | % change unless otherwise indicated |
2005 | 2006 | 2007 |
---|
GDP growth | 1.4 | 2.0 | 2.2 |
Household savings ratio | 10.8 | 10.3 | 10.4 |
Consumer price index | 2.6 | 2.4 | 1.7 |
Short-term interest rate (%) | 2.2 | 2.2 | 2.9 |
Unemployment rate (%) | 8.4 | 8.5 | 8.4 |
General government financial balance (% GDP) | 0.0 | -0.4 | -0.7 |
Current account balance (% GDP) | 1.4 | 0.8 | 1.0 |
Source: OECD©
OECD Observer, No. 252/253, November 2005
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