Toward a Growth-Friendly Fiscal Consolidation in Belgium

Belgium - Selected Issues, IMF Country Report No. 15/71

28 Pages Posted: 17 Mar 2015

See all articles by Jean-Jacques Hallaert

Jean-Jacques Hallaert

International Monetary Fund (IMF); Groupe d'Economie Mondiale (GEM)

Sylwia Barbara Nowak

International Monetary Fund (IMF)

Date Written: March 13, 2015

Abstract

Belgium faces two main fiscal challenges that call for a durable fiscal consolidation. First, at above 105 percent of GDP, public debt creates vulnerabilities. Second, the aging population and early access to pension benefits will lead in the medium term to significant fiscal costs. To address these challenges, the government plans to achieve a balanced budget (both headline and structural) by 2018. The purpose of this paper is to assess whether government plans meet the objectives of growth-friendly and sustainable adjustment. It is organized as follows. The first section describes Belgium’s record of fiscal consolidation. The second section highlights the features of a high quality fiscal consolidation in Belgium. The third section analyzes the implications of decentralization for fiscal consolidation.

Keywords: Belgium, fiscal policy, expenditure-based consolidation

JEL Classification: E62

Suggested Citation

Hallaert, Jean-Jacques and Hallaert, Jean-Jacques and Nowak, Sylwia Barbara, Toward a Growth-Friendly Fiscal Consolidation in Belgium (March 13, 2015). Belgium - Selected Issues, IMF Country Report No. 15/71, Available at SSRN: https://ssrn.com/abstract=2577923

Jean-Jacques Hallaert (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Groupe d'Economie Mondiale (GEM) ( email )

28, rue des Saints-Pères
Paris, 75007
France

HOME PAGE: http://gem.sciences-po.fr

Sylwia Barbara Nowak

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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