Economic growth forecast scaled back to 2.2pc

5th December 2005, Comments 0 comments

5 December 2005, BRUSSELS — The Belgian national bank NBB is forecasting 2.2 percent economic growth next year and a federal budget deficit of 0.4 percent.

5 December 2005

BRUSSELS — The Belgian national bank NBB is forecasting 2.2 percent economic growth next year and a federal budget deficit of 0.4 percent.

The economic growth forecast is 0.2 percent lower than six months ago. For 2005, the NBB expects growth of 1.4 percent.
 
Inflation is forecast to decline in 2006 to 2.3 percent from 2.5 percent this year, newspaper 'De Tijd' reported on Monday.

The NBB also expects a federal budget deficit of 0.4 percent of Gross Domestic Product (GDP). A balanced budget is expected this year.

NBB governor Guy Quaden said the forecast budgetary shortfall next year does not take into account additional federal measures.

"If the government takes additional measures, a balanced budget is again attainable," Quaden said.

However, the governor is "not totally pleased". He said the budget balance is still too dependent on exceptional factors, such as record low interest rates or one-off income posts.

"To meet the future costs of the aging population, we need a structural balance or, even better, a structural surplus," he said.

On the other hand, Quaden said Belgium's public finances were performing relatively well in comparison with other eurozone countries.

He expects public debt will fall to 90.9 percent of GDP by the end of 2006 compared with 94.2 percent at the end of 2005.

In the period 2004-06, some 75,000 jobs were created, but due to the increase in the working population, the number of jobless workers continued to rise.

The jobless rate will stabilise next year at 8.4 percent.

To boost employment, Quaden said the Scandinavian model must be applied. This involves raising the availability of jobless workers and obligating the unemployed to undergo training and education.

[Copyright Expatica News 2005]

Subject: Belgian news

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