Partial success on wage moderation

12th June 2006, Comments 0 comments

12 June 2006, BRUSSELS — Belgian wages increased on average 4.2 percent in the past two years, indexed to inflation and lower than the agreed standard of 4.5 percent.

12 June 2006

BRUSSELS — Belgian wages increased on average 4.2 percent in the past two years, indexed to inflation and lower than the agreed standard of 4.5 percent.

But the National Bank of Belgium chief, Guy Quaden, said he expects wages in the nation's three neighbouring countries would have risen by less. Exact figures are not yet available.

To reconcile the government's focus on moderating wages but not stifling consumption, Quaden urged for "fiscal and parafiscal measures", but said that was a matter for political debate.

The national economy is forecast to grow by 2.5 percent this year.

In the next two years, an expected 80,000 extra workers will be employed. But because that figure more or less equates with the growth of the active population, the unemployment rate will only slightly decrease, from 8.4 to 8.2 percent.

The increase in hourly wages (4.2 percent) was lower than the standard of 4.5 percent previously forecast by the government.

Spending by Belgian households remains healthy. The NBB expects an increase of 2.1 percent this year and 1.8 percent in 2007.

Consumption in Belgium has been higher in recent years than the European average, but the reasons why have changed.

Up until 2004,  families spent more because they started saving less. The savings ratio will remain stable in coming years, but disposable income will increase due to tax reforms and a rise in income from investments.

Total disposable income has increased due to the fact there are more people working in Belgium: an extra 143,000 people have found work in past four years.

[Copyright Expatica News 2006]

Subject: Belgian news

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