The debt ratio has fallen by 13 points from a 1993 peak. However, this reflected mainly lower interest costs and, until recently, higher taxes. Revenue measures include an easing of social contrib-utions, with minor tax offsets. Primary spending is to rise by close to 2 percent in real terms. Effective marginal tax rates on households are very high in some cases when the unemployed find work.
Restraints remain on agency hiring and fixed-term work.
Wage norms have safe-guarded competitiveness but compressed differentials. The short-term outlook is for growth to continue at above potential, but with some slowing as a result of weaker expansion in foreign markets. Although exports to Asia are very modest, the main risk to the outlook lies in the impact of developments there on the global environment, including Belgium's competitiveness in third markets. On the positive side, market interest rates have declined in recent months. GDP is projected by the staff to grow by 2.6 percent in 1998.