OECD cuts Belgian growth forecast to zero for 2013

Weak domestic demand and subdued exports are likely to mean a second year without economic growth for Belgium in 2013, reports Reuters’ Philip Blenkinsop. The Organisation for Economic Cooperation and Development downgraded its earlier forecast yesterday, despite the fact that Belgium – the eurozone’s sixth-largest economy – had weathered the crisis fairly well, with a smaller rise in unemployment than in many other OECD countries. Belgium would register zero growth this year rather than the 0.5% expansion forecast in November. The economy shrank by 0.3% in 2012, according to the Belgian central bank. National output would rise by 1.2% next year, the OECD said, less than the 1.6% forecast previously. The organisation said Belgium must stick to its goal of reaching a structural budget balance by 2015 to allow room for financing age-related increases in spending. Its public-sector debt is hovering just below 100% of output, giving it little room for manoeuvre. Belgium has sought since 2012 to limit early retirement – from an average of 59 years to nearer the official age of 65. The OECD said it needed to do more to provide incentives for older workers to seek employment. It also said Belgium should seek to make its health service more cost-efficient and produce a long-term infrastructure plan, with charges for road use to reduce congestion.