1 Context
The Covid, the war in Ukraine and the energy crisis… Belgium has spent too much money. The International Monetary Fund (IMF) also points the finger at our country: we have to tighten our belts. “The budget deficit is expected to decline. This will require an adjustment of around 0.8% of GDP or more next year”the IMF said in a statement.
0.8% of GDP is 4.6 billion euros to be found in 2023 alone. The deficit is too high “It is unsustainable in the long term, there the message is clear: it cannot remain the case”, says Pierre Wunsch, Governor of the National Bank of Belgium. Before continuing: “Are we going to be bankrupt tomorrow? No, we have to focus on the task of reducing this deficit.”
2 Budget adjustments
But how to do it ? According to economist Bruno Colmant, citizens will not have to contribute too much to this effort. “I believe that the population can be reassured: there will certainly be some technical budgetary adjustment measures that we should not feel in our purchasing power. On the other hand, in the long term, structural measures are needed”he recommends.
The IMF recommends that Belgium reduce public spending, initiate tax reforms, the labor market and especially pensions.
3 Pensions
“The aging of the population will condition the finances of the State for 20 to 30 years. There is a fairly balanced proposal that had been made by the Minister of Pensions, I think it should succeed”resumes Bruno Colmant
4 Wage indexation
The IMF is also calling for a review of wage indexation since the current system places too many burdens on the shoulders of employers.
