Meanwhile, it is expected that around 10,000 public sector jobs will disappear as a result of public spending cuts.
The Bank predicts that by 2017 unemployment in Belgium will have fell to 7.9%, down from 8.5% this year. This is set against a backdrop of a growing working population and the Federal Governments measures to keep people at work for longer.
Growth predictions revised upwards
In December of last year the National Bank of Belgium predicted 0.9% growth for this year and 1.4% for next year. The bank has since revised its growth predictions to 1.2% and 1.5% respectively. The National Bank now even predicts growth of 1.7% for 2017.
The revised growth figures have come about as a result of the falling oil price and fall in value of the euro. Both these factors have served to improve competiveness. Furthermore, the European Central Bank has recently taken measures to help kick start the economy in the Eurozone.
Mr Smets expect Belgian exports to rise as the economic recovery in Europe starts to kick in. Wage restraint will enable Belgian companies to retain or even increase their market share. With this in mind, the Governor of the National Bank calls the one-off measures not to increase wages by inflation of wages “An important measure”.
"Wage costs will be lower making companies more competitive. This in turn means that they will be about to export more and create jobs. This is better still for purchasing power.”