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Sensitivity analysis
Since the Belgian public debt is still quite
sizeable, it is still sensitive to interest rate fluctuations. The
federal government (which holds more than 90% of the total debt) manages
its debt in such a way as to control the various risks (exchange rate,
interest rate and refinancing risks). This risk management strategy is
in line with the general guidelines on the debt which are imposed each
year.
In view of the average duration of the
outstanding debt, the effect of a rise in the interest rate will not
feed through to the interest charges until much later. Table 8
illustrates the impact on the interest charges of an increase in the
interest rate assumptions of 100 basis points for the period 2008-2011.
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TABLE 8
Impact of a change in the interest rate assumptions |
|
% of GDP |
2009 |
2010 |
2011 |
|
Degree to which interest charges deviate from the scenario described |
0,2 |
0,3 |
0,3 |
In the current international economic context,
there is less of a risk in the short term of seeing highly divergent
trends in interest rates than of seeing inflation and, more generally,
the overall economic environment, develop less favourably.
A change in GDP mainly affects public revenue
and, to a lesser extent, expenditure. The growth scenario used in the
stability programme is compared with a growth path corresponding to
estimated potential growth, a scenario with an annual growth rate that
is 0.5 percentage point lower and a scenario where growth is 0.5
percentage point higher.
|
TABLE 9
Sensitivity of the overall balances to changes in growth |
| |
2008 |
2009 |
2010 |
2011 |
|
Stability programme |
|
Real GDP growth |
1,9 |
2,0 |
2,0 |
2,0 |
|
Financing balance |
0,0 |
0,3 |
0,7 |
1,0 |
|
Potential growth |
|
Real GDP growth |
2,1 |
2,0 |
2,0 |
1,9 |
|
Financing balance |
0,1 |
0,4 |
0,8 |
1,0 |
|
Weaker growth |
|
Real GDP growth |
1,4 |
1,5 |
1,5 |
1,5 |
|
Financing balance |
-0,3 |
-0,2 |
-0,1 |
-0,1 |
|
Stronger growth |
|
Real GDP growth |
2,4 |
2,5 |
2,5 |
2,5 |
|
Financing balance |
0,3 |
0,8 |
1,5 |
2,1 |
The growth assumption used in this stability
programme for the 2008-2011 period is very close to potential growth.
The divergence from the base scenario is therefore very small. If growth
surpasses the estimates, and provided that the additional growth is all
used to improve the overall balance, the surplus would reach 2.1% of GDP
in 2011. If growth were 0.5 of a percentage point lower in each year of
the period considered, from 2008 to 2011, and in the absence of any
compensatory efforts, a small deficit of 0.1% of GDP would be recorded
at the end of the period.
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