The economic impact of the war in Ukraine amounts to more than four billion in Belgium – Economic Policy
The various economic measures taken by Belgian governments in response to the Russian invasion and soaring energy prices amount to 4.05 billion euros, announces the National Bank of Belgium (BNB). The federal government released 3.79 billion for its package of measures relating to energy, military and humanitarian expenditure.
“With a persistently high fiscal deficit and rising debt dynamics, public finances were already weakened before the energy and Ukrainian crises“, according to the National Bank. “The scope for measures to compensate for the loss of purchasing power is limited. It is better to target only the hardest hit households and without falsifying the price signal.”
Currently, purchasing power compensation measures are mainly aimed at lowering the price of energy. The BNB notes that fiscal room for maneuver in Belgium is more limited than in other eurozone countries, due to a larger budget deficit and growing debt.
In total, the federal government released 3.79 billion for its exceptional measures. The various energy measures (reduction of VAT on gas and electricity, energy check of one hundred euros, etc.) cost 2.47 billion euros. Some 450 million were also devoted to military expenditure and 800 million euros were released for humanitarian aid and the reception of refugees. The rest of the extraordinary expenditure mainly concerns Flanders, amounting to 264 million.
The National Bank publishes for the first time a “table of the economic impact of the war in Ukraine”. It should be updated monthly.
“With a persistently high budget deficit and rising debt dynamics, public finances were already strained before the energy and Ukrainian crises,” according to the National Bank. “The margin for measures to compensate for the loss of purchasing power is limited. It is better to target only the hardest hit households and without distorting the price signal.” Currently, purchasing power compensation measures are mainly aimed at lowering the price of energy. The BNB notes that fiscal room for maneuver in Belgium is more limited than in other eurozone countries, due to a larger budget deficit and growing debt. In total, the federal government released 3.79 billion for its exceptional measures. The various energy measures (reduction of VAT on gas and electricity, energy check of one hundred euros, etc.) cost 2.47 billion euros. Some 450 million were also devoted to military expenditure and 800 million euros were released for humanitarian aid and the reception of refugees. The rest of the extraordinary expenditure mainly concerns Flanders, amounting to 264 million. The National Bank publishes for the first time a “table of the economic impact of the war in Ukraine”. It should be updated monthly.