The Federal Bureau of planning has published its forecasts for the Belgian economy for the next 5 years. Although economic growth will slow, the number of jobs will grow. Growth will remain stable at 1.6% until 2020.
This is largely thanks increased domestic demand. Belgians’ disposable income is increasing thanks to the tax shift. This is reflected in increased consumption and more new jobs being created. The increase in disposable income will tail off between 2020 and 2023 and the balance of trade will be negative. This will be reflected in the economic growth predictions. Growth will fall back to 1.2% be 2023.
A quarter of a million jobs will be created over the next 5 years. This is considerably more than over the past 5 years. Fewer industrial jobs will be lost than in the past 5 years. Meanwhile, it is predicted that 24,000 jobs will be created in the construction industry.
Although the percentage of the working age population in employment will rise by more than 3% it will be less than the target agreed with Europe. In 2020 70.4% of the working age population will be in work, while the target agreed for 2020 is 73.2%.
In 2023 the Federal Planning Bureau predicts that 72% of the working age population will be in employment.
Unemployment will fall sharply this year. This trend will continue over the coming 5 years. It is predicted to fall to 7.2%, this would be its lowest level since the 1970’s. The percentage of people working will increase in, amongst others, the age category between 55 and 64 years-of-age.
No balanced budget
The Federal Planning Bureau predicts that the budget deficit will rise to 1.7% in 2020 unless additional efforts are made.
The prediction of an increase in interest rates is bad news for the Exchequer as around 2 thirds of the saving that have been made over the past five years have been thanks to the low interest rate levels.