BRUSSELS, June 7 (Xinhua) -- Belgium's economy is expected to grow by about 1.2 percent annually over the next three years, said a report published Friday by the National Bank of Belgium (BNB).
While the growth rate of business investment is expected to steadily normalise and net exports will gradually weigh more heavily on growth, household consumption is projected to increase more strongly than in the last few years.
The report attributed this to the strong purchasing power, which by 2021 is set to be 3.5 percent higher per capita, mainly due to wage growth picking up, predicting that inflation rate would eventually approach the 2 percent mark.
The budget deficit is expected to deteriorate further over the coming years and major efforts will still have to be made if a structural budget balance is to be reached.
Although invariably strongly influenced by international factors, economic activity in Belgium has clearly remained more robust than in the euro area in 2018, according to the BNB's report.
Despite weak external demand and sustained uncertainty, growth levels have only marginally decreased, and in 2020 and 2021, the Belgian economy is expected to expand at a more or less stable pace of 1.1 percent and 1.2 percent respectively.
Some 120 000 extra jobs are expected to be created during the projection period, according to the report.
However, employment growth is expected to wane in the longer run due to the waning impact of the wage moderation policy and labor-supply-boosting measures as well as existing tightness in some segments of the labor market.
As regards to public finances, the budget deficit is likely to systematically deteriorate further if there is no change of policy, to reach 2.1 percent of GDP in 2021. The national debt is predicted to come down but should still be higher than GDP in 2021.
