Belgium's Economy Three Things To Watch

Belgium's economic outlook is characterized by weak growth and persistent inflation, with fiscal consolidation measures expected to weigh on household consumption. Policymakers have limited room to act, as the government focuses on reducing public deficits.

Key Takeaways

• 1.Belgian economic growth is expected to slow to 0.7% in 2026, driven by high energy prices and the lack of government fiscal cushioning.
• 2.New fiscal measures regarding unemployment benefits and wage indexation caps are expected to dampen household consumption in the second half of the year.
• 3.Inflation remains high at over 4%, with an expected annual average of 3.6%.

Table of Contents

• A weak first half, with industry still under pressure
• Fiscal measures are about to bite
• Limiting unemployment benefits
• Making the labour market more flexible
• Limiting automatic indexation
• Public finances: Belgium gets some breathing space, but not a solution
• Bottom line: weak growth, stubborn inflation

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