Belgium: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belgium
IMF Staff Country Reports, March 2, 2023
Source details
- Canonical URL
- Belgium: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belgium
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Bibliographic details
- Published: March 2, 2023
- Series: IMF Staff Country Reports
Overview
- Publication date: March 2, 2023
- Summary finding: Belgium’s post-pandemic recovery has slowed with spillovers from Russia’s war in Ukraine, high inflation, tighter financial conditions, and elevated uncertainty.
- Policy context: Federal and regional authorities provided timely and substantial support to households and firms in response to the spike of energy prices.
Fiscal policy and energy support
- Energy support and automatic indexation of wages and benefits helped cushion impacts but came at significant fiscal cost.
- Effect on fiscal balances:
- Fiscal deficit increased in 2022 and 2023 (no numerical values provided in the source).
- Policy implication:
- Lower energy prices would reduce fiscal pressures.
Macroeconomic developments
- Inflation: High inflation noted as a drag on recovery.
- Financial conditions: Tighter financial conditions contributing to slower recovery and elevated uncertainty.
- Risk environment:
- Risks are tilted to the downside, including escalation of the war in Ukraine and a sharper-than-expected tightening of financial conditions.
- Scenario: Progress on structural reforms before elections in 2024 could boost confidence.
Labor market
- Labor market remained tight.
- Key indicators:
- Record-high job creation.
- Low unemployment.
External sector
- Current account:
- The external current account swung to a large deficit in 2022.
- Primary drivers: Higher energy imports and lower vaccine exports.
Financial sector
- Characteristic: Resilient financial sector.
- Challenge: Facing pressures from the weaker macro-financial environment.
Structural reforms
- Some important structural reforms took place in 2022.
- Policy recommendation implied: Further progress on structural reforms, particularly ahead of elections in 2024, could help restore confidence.
Subjects and keywords (as listed)
- Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, Energy prices, Inflation, International organization, Labor, Monetary policy, Prices, Wage indexation, Wages
- Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), consumer confidence, Energy prices, Global, indexation mechanism, Inflation, money market rate, Policy discussion, policy reform, product market reform, State secretaries Bertrand, Wage indexation, Wages
Content in this bundle
- 1belea2023001