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2006 OECD Economic Outlook, Volume 2006 Issue 1

image of OECD Economic Outlook, Volume 2006 Issue 1
OECD's twice-yearly assessment of the major economic trends and policies in member countries and selected non-members. This issue covers the outlook to the end of 2007.  Together with a wide range of cross-country statistics, the Outlook provides a unique tool to keep abreast of world economic developments. This issue also contains a special chapter on Future Budget Pressures Arising from Spending on Health and Long-Term Care.

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Belgium

The economic slowdown came to an end in mid-2005 and activity appears ready to accelerate in 2006, thanks to the impetus coming from export market growth. In addition, consumer expenditure will benefit from the introduction of tax cuts and improved labour market trends. Even though real GDP growth will rise above potential (of nearly 2%), the output gap will remain negative by the end of 2007. Thus, core inflation is projected to remain subdued, with headline inflation falling back as energy prices stabilise. Further fiscal consolidation through expenditure restraint is required to secure a sustainable path for public finances and continued government debt reduction. The amount of required consolidation can be reduced by implementing labour market measures that stimulate job creation and increase employment rates, which are low by international standards, particularly for older workers and among the younger generations.

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