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Outlook for 2011-2014
The Federal Planning Bureau
predicts growth of 2 % in 2011 and 2.3 % in 2012. Belgium is therefore
expected to continue outperforming the euro area average, as it did in
2009 and 2010. Similarly, the latest consensus forecast issued by
Belgian Prime News in January – indicating the average prospects assumed
by the large financial institutions in Belgium – expects Belgium to see
stronger growth than the euro area countries, and forecasts 2% economic
growth in 2011. Taking account of the uncertainty surrounding the
projections, the government considers that 2 % growth in the medium term
is realistic.
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TABLE 2
Detailed medium-term macroeconomic projections |
|
percentage change unless otherwise stated |
2010
in € billion |
2010
|
2011 |
2012 |
2013 |
2014 |
|
1.Real GDP |
289,0 |
2,1 |
2,0 |
2,3 |
2,1 |
2,3 |
|
2.Nominal GDP |
351,4 |
3,6 |
4,0 |
4,3 |
3,9 |
4,3 |
|
Components of real GDP |
|
3.Private consumption expenditure |
150,4 |
1,4 |
1,5 |
1,7 |
1,7 |
1,8 |
4.Government consumption expenditure
|
62,8 |
1,1 |
1,1 |
2,1 |
1,9 |
2,0 |
|
5.Gross fixed capital formation |
61,3 |
-1,9 |
2,9 |
3,4 |
1,5 |
2,4 |
|
6.Changes in inventories and net acquisition of valuables |
0,1 |
0,1 |
0,0 |
0,0 |
0,0 |
0,0 |
|
7.Exports of goods and services |
249,9 |
10,1 |
4,6 |
4,4 |
4,7 |
4,9 |
|
8.Imports of goods and services |
236,1 |
7,8 |
4,2 |
4,3 |
4,3 |
4,6 |
|
Contributions to real GDP growth |
|
9.Final domestic demand |
- |
0,2 |
1,5 |
2,1 |
1,7 |
1,9 |
|
10.Changes in inventories and
net acquisition of valuables |
- |
-0,5 |
-0,1 |
0,0 |
0,0 |
0,0 |
|
11.External balance of goods and services |
- |
1,9 |
0,5 |
0,2 |
0,4 |
0,4 |
|
Source: Federal Planning
Bureau |
The recovery is perceptible in
the various sectors. Domestic demand is assumed to make a large
contribution to GDP growth. Exports are also a key driver. Following
10% expansion in 2010, export growth will revert to a more modest
level in the medium term. However, the expansion falls short of the
export market growth so that market shares are being eroded.
Nevertheless, the trade balance remains in surplus for the time
being. Owing to the improvement in confidence, investment is also
expected to expand considerably, gathering momentum in 2012, despite
the rise in interest rates.
|
TABLE
3
Prices in the medium term |
|
% change |
2010
(2000=100) |
2010
|
2011 |
2012 |
2013 |
2014 |
|
1.GDP deflator |
121,6 |
1,5 |
1,9 |
1,9 |
1,8 |
1,9 |
|
2.Private consumption deflator |
122,6 |
2,3 |
3,3 |
1,9 |
1,9 |
2,0 |
|
3.HICP |
122,7 |
2,3 |
3,5 |
1,9 |
1,9 |
2,0 |
|
4.Public
consumption deflator |
136,4 |
1,3 |
2,8 |
2,3 |
1,9 |
2,0 |
|
5.Investment deflator |
116,0 |
0,8 |
1,8 |
1,6 |
1,5 |
1,7 |
|
6.Export price deflator (goods and services) |
113,8 |
4,4 |
4,2 |
2,1 |
1,9 |
2,2 |
|
7.Import price deflator (goods and services) |
115,5 |
6,2 |
6,2 |
2,1 |
1,9 |
2,2 |
|
Source : Federal Planning Bureau |
The Federal Planning Bureau expects
inflation to gather pace in 2011, predicting a rise of 3.5% in the
harmonised index of consumer prices. The index is expected to drop to
1.9 % in 2012 and stabilise at that level in the medium term. Price
increases in Belgium are noticeably higher than the euro area average,
certainly in 2011. In fact, the Belgian consumer price index is more
sensitive to increases in commodity prices, especially the oil price.
That may be due to the high energy consumption of households, relatively
low excise duties and the substantial and swift impact of energy price
increases on gas and electricity tariffs. Against that background, the
federal government recently took the first steps to reduce the
volatility of energy prices (see chapter 7).
The oil price will continue to be
a major determinant of price levels in the future. In that regard, a
number of uncertain factors are involved, such as the impact of the
political turmoil in North Africa on oil supplies and oil prices.
|
TABLE
4
Labour market |
|
% change, unless otherwise stated |
2010
Level |
2010 |
2011 |
2012 |
2013 |
2014 |
|
1.Domestic employment |
4.466,6 (a) |
0,6 |
0,9 |
0,9 |
1,0 |
1,1 |
|
2.Numbers of hours worked |
6.473,2 (b) |
0,8 |
1,2 |
1,1 |
1,0 |
0,9 |
|
3.Unemployment rate (%, Eurostat definition) |
8,4 |
8,4 |
8,3 |
8,3
|
8,1 |
8,0
|
|
4.labour productivity, persons |
64.700 (c) |
1,4 |
1,1 |
1,4 |
1,1 |
1,3 |
|
5.Labour productivity, hours worked |
44,6 (c) |
1,2 |
0,8 |
1,2 |
1,1 |
1,4 |
|
6.Compensation of employees |
182 (d) |
1,6 |
4,3 |
3,8 |
4,3 |
4,8 |
|
7.Compensation per employee |
48.700 (c) |
1,0 |
3,3 |
2,7 |
3,1 |
3,5 |
|
(a) thousands - (b) millions of hours - (c) € - (d)
€ billion |
|
Source : Federal Planning Bureau |
The economic crisis had a
relatively limited impact on employment in Belgium. That was due to
the action of the automatic stabilisers, intensive use of federal
and regional anti-crisis measures, such as the system of temporary
lay-offs, the crisis time credit, and the reduction in working time
during the crisis, the reduction in employers’ labour costs for
certain target groups (the “Win-Win” plan), and some additional
crisis measures, notably targeted fiscal measures in favour of
labour-intensive sectors such as the hotel and restaurant trade and
the construction industry, primarily during the first phase of the
crisis. Total employment is expected to increase by 0.9 % in both
2011 and 2012, exceeding the forecasts for the euro area (increases
of 0.4 % and 0.8 % respectively). In the medium term, too, that
growth looks set to continue. As a result of this favourable trend,
the unemployment rate is also expected to fall, declining from 8.4 %
in 2010 to 8 % in 2014 if the policy is unchanged (Eurostat
definition).
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