Belgium’s economic growth is likely to be lower than the average for the Euro zone in the next two years, the OECD notes in its latest Economic Outlook, published on Wednesday, and suggests, among other things, that Belgium improve the skills of its immigrants to make growth more inclusive. For 2018 and 2019, the OECD (Organisation for Economic Growth and Development) forecasts that Belgium’s gross domestic product (GDP) will grow by 1.4%. This is slightly less than Euro zone’s projected average growth: 1.8% in 2019 and 1.6% in 2020.
The report recommends that “public investment, which has been low for several decades, should be increased to boost productivity growth”. To ensure fiscal sustainability, it adds, “this investment should be financed through reductions in inefficient public spending, higher user fees or through tapping private sources of finance”.
The Paris-based international organisation also suggests that, to make economic growth greener, transport infrastructure needs to be improved around major urban areas, congestion charges should be extended, and the favourable tax treatment of company cars amended.
“To make growth more inclusive, the skills and labour market performance of immigrant, low-skilled and older workers should be enhanced,” the OECD recommends.
“Further reducing labour taxes, especially for low-skilled workers, would help as the tax wedge on labour earnings remains one of the highest in Europe,” according to the report.
The OECD also stresses the importance of “ensuring that appropriate financing tools are available for the scaling-up of young, innovative firms” and of “further streamlining public support for research and development and innovation.”
The organisation has good news for Belgium on the job front, noting that “employment growth is projected to continue, leading to further declines in the unemployment rate to 5.9% in 2020.