Belgium: Selected Issues

International Monetary Fund

No 2023/387, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper explores different aspects of fiscal consolidation in Belgium. Belgium is facing higher structural deficits and rising debt after the pandemic and energy crisis. Fiscal consolidation is needed to lower inflation, rebuild buffers, reduce debt, and preserve Belgium’s social contract. Comparisons with peers show that rationalizing and increasing the efficiency of social benefits and the public wage bill would need to be at the core of the consolidation effort. All federal entities should share the burden of the adjustment, in a coordinated manner, with accountability at all levels of government, and within a credible and clear multi-year consolidation plan. Comprehensive spending reviews would help target budgetary saving. In order to mitigate the growth impact in the near term and boost potential growth, public investment should be preserved, and the adjustment should go together with structural reforms to increase labor force participation and productivity.

Keywords: state government expenditure; health efficiency frontier; cost of aging; major spending category; healthcare expenditure; Aging; Pension spending; Pensions; Fiscal consolidation; Europe; Global (search for similar items in EconPapers)
Pages: 48
Date: 2023-12-08
New Economics Papers: this item is included in nep-eur
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