Economic Outline

Economic Indicators

Situated between the UK, Germany and France, Europe’s three main economies, Belgium benefits from a strategic geographical position. Despite facing global economic challenges, Belgium's economy displayed remarkable resilience in 2024, with GDP growing 1.1%. However, growth in 2025 was subdued, mainly due to weak investment. Private consumption strengthened, supported by rising real incomes. While business investment slowed, weighed down by tighter financial conditions, household investment remained constrained. For the year as a whole, the IMF estimated a 1.1% rise in economic activity. Private consumption is expected to rise moderately over the forecast horizon, reflecting modest disposable income growth. Despite declining, the saving rate should remain high in 2026-27 due to weak consumer confidence. Business investment will continue to grow at a slower pace, supported by lower financing costs and improved external demand. Overall, investment is projected to grow only modestly in 2026 and 2027, weighed down by tighter financial conditions and geopolitical uncertainty (EU Commission). GDP growth is forecast at 1.2% this year, and 1.3% in 2026 (IMF).

In 2025, the government budget deficit increased to 5.2% of GDP. A strong decline in revenues, mainly from income and wealth taxes, was compounded by higher expenditure. The increase in expenditure was driven by defence and social benefits, alongside ageing-related costs and public debt interest. In 2025, the deficit is expected to rise further to 4 GDP, as no major new consolidation measures are planned (IMF). Expenditure on social benefits will continue to grow, and interest costs will increase due to higher debt levels and refinancing rates, despite falling interest rates. These increases will be partly offset by a moderation in government investment after the election year. In 2025, general government debt increased to around 107.9% of GDP, driven by the persistent government deficit. In 2026 and 2027, debt is projected to rise further to 112.8% of GDP (EU Commission forecast), driven by the government deficit, despite the fact that federal and regional governments have recently taken steps toward consolidation and sovereign bond spreads have remained stable. Meanwhile, inflation up to 4.3% in 2024 ... down to 2.1% in 2025 and 2% in 2026 (IMF) and easing inflationary pressures over the forecast horizon are set to bring it down to 2.8% in 2026 and 2.2% in 2027 (IMF).

Employment growth remained sluggish through 2025, mainly due to weakness in industry. Over the year as a whole, around 21,200 net new jobs were created. Employment is expected to increase steadily in the coming years, with the rise in the retirement age likely to boost labour market participation, while the unemployment rate is projected to remain stable at around 5.7%. Wage growth, driven by automatic wage indexation, is expected to slow due to the anticipated deceleration of inflation. The low labour market participation rate remains a major challenge for Belgium in the coming years, with unemployment disproportionately affecting young people, non-European immigrants and the region of Wallonia as a whole. Overall, Belgian citizens enjoy a high GDP per capita, estimated on average at GDP per capita ... USD 58,256 by the IMF for 2025.

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