Advanced Search
MyIDEAS: Login to save this article or follow this journal

Economic projections for Belgium – Spring 2011

Contents:

Author Info

  • National Bank of Belgium

    (National Bank of Belgium)

Registered author(s):

    Abstract

    At the beginning of 2011, the recovery phase seen in the global economy over the past two years reached a degree of maturity. Activity in the various economic regions should gradually progress from being export-led to become more broadly based. At the same time, the improvement in the economic situation, especially in the emerging countries, triggered a rapid rise in commodity prices. However, serious factors of uncertainty still linger. The legacy of the 2008-2009 crisis, the seriously degraded public finances in most advanced economies on both sides of the Atlantic require consolidation measures. Similarly, financial institutions in general will have to continue their restructuring. These factors, which could hold back the economy, are compounded by the risks resulting from the natural disasters in Japan and political and social tensions in the Middle East and North Africa. In the euro area, there are significant internal divergences, for instance the unexpected vigour of the recovery in Germany and, conversely, the decline in activity in the economies facing serious structural problems. The recovery is expected to continue, but less vigorously than at the beginning of 2011. In Belgium, recent developments in economic activity have been better than previously predicted. The Belgian economy, in Germany’s wake, has succeeded in taking advantage of the revival in global demand, while private consumption has rapidly picked up. Business and household investment should gradually recover too. Overall, growth came to 2.1 % in 2010; it is projected to reach 2.6 % in 2011 before subsiding to 2.2 % in 2012, thus outpacing growth in the euro area. The continuing expansion of activity is likely to be supported by consolidation of the labour market. Job creation should be maintained as, in net terms, around 77 000 additional jobs will be generated between the end of 2010 and the end of 2011. The decline in unemployment which had begun in early 2010 is expected to continue steadily, reducing the average unemployment rate from 8.4 % in 2010 to 7.3 % in 2012. In parallel with the clear recovery of activity and demand at global level, external inflationary pressures strengthened considerably in Belgium during 2010 and at the beginning of 2011. Overall, as an annual average, the rise in consumer prices is projected to increase from 2.3 % in 2010 to 3.4 % in 2011, before dropping back to 2.2 % in 2012, as energy price inflation is set to calm down. However, sustained wage growth could increasingly drive up underlying inflation. According to the latest data, public finances ended the year 2010 with a deficit of 4.1 % of GDP. In the macroeconomic context described above, the deficit is projected at 3.5 % of GDP in 2011. However, it is likely to increase again in 2012 to 4.1 % of GDP. The debt ratio is expected to fall from 96.6 % of GDP in 2010 to 95.4 % in 2012.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.nbb.be/doc/oc/repec/ecrart/ecorevI2011_H1.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by National Bank of Belgium in its journal Economic Review.

    Volume (Year): (2011)
    Issue (Month): I (June)
    Pages: 7-26

    as in new window
    Handle: RePEc:nbb:ecrart:y:2011:m:june:i:i:p:7-26

    Contact details of provider:
    Postal: Boulevard de Berlaimont 14, B-1000 Bruxelles
    Phone: (+ 32) (0) 2 221 25 34
    Fax: (+ 32) (0) 2 221 31 62
    Email:
    Web page: http://www.nbb.be/
    More information through EDIRC

    Related research

    Keywords: Belgium; macroeconomic projections; Eurosystem;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nbb:ecrart:y:2011:m:june:i:i:p:7-26. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.