Belgium city from above

Belgium Economic Forecast

Belgium Economic Outlook

According to a preliminary estimate, in Q3, GDP growth increased to 0.5% on a quarter-on-quarter basis, up from 0.3% in Q2. The reading was driven by growth in the services and construction sectors. However, manufacturing experienced a decline. In Q4, growth is expected to slow slightly. Economic sentiment remained pessimistic in October, primarily due to challenges in the retail sector. More positively, inflation continued to slow during the month. The ongoing deceleration of price pressures, coupled with the wage indexation mechanism, is expected to support private consumption. On the other hand, the subdued external environment, along with strong imports driven by robust domestic demand, are likely to limit the growth contribution of the external sector. Furthermore, tight financial conditions and higher wage-related costs for companies should hit private investment.

Belgium Inflation

Harmonized inflation fell to minus 1.7% in October from 0.7% in September. The decline was driven by a more pronounced contraction of housing and utilities prices. Our panelists see inflation picking up slightly in 2024 relative to this year’s projected average level. Gas prices and the impact of wage indexation on core inflation are key factors to watch.

This chart displays Economic Growth (GDP, annual variation in %) for Belgium from 2013 to 2022.

Belgium Economic Data

2018 2019 2020 2021 2022
Population (million) 11.4 11.5 11.5 11.6 11.6
GDP (EUR bn) 460 479 461 508 554
GDP per capita (EUR) 40,359 41,784 39,989 43,958 47,689
Economic Growth (Nominal GDP, ann. var. %) 3.4 4.0 -3.7 10.2 9.1
Economic Growth (GDP, ann. var. %) 1.8 2.2 -5.3 6.9 3.0
Domestic Demand (ann. var. %) 2.6 1.9 -6.2 6.1 2.9
Private Consumption (ann. var. %) 1.9 1.7 -8.2 6.3 3.2
Government Consumption (ann. var. %) 1.6 2.2 -0.3 5.2 4.2
Fixed Investment (ann. var. %) 3.0 5.1 -5.2 5.0 -0.2
Exports (G&S, ann. var. %) 1.1 2.4 -6.3 13.9 4.9
Imports (G&S, ann. var. %) 2.0 2.0 -7.4 13.0 4.9
Industrial Production (ann. var. %) 1.2 4.8 -3.8 16.8 -0.7
Disposable Income (ann. var. %) 1.1 2.6 0.4 3.4 -0.5
Unemployment (% of active population, aop) 6.0 5.4 5.6 6.3 5.6
Fiscal Balance (% of GDP) -0.9 -2.0 -8.9 -5.4 -3.5
Public Debt (% of GDP) 99.9 97.6 111.8 108.0 104.3
Inflation (HICP, ann. var. %, eop) 2.2 0.9 0.4 6.6 10.2
Inflation (HICP, ann. var. %, aop) 2.3 1.2 0.4 3.2 10.3
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
10-Year Bond Yield (%, eop) 0.77 0.08 -0.39 0.18 3.16
Stock Market (var. of BEL20 %) -18.5 22.0 -8.5 19.0 -14.1
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) -4.2 0.5 6.5 6.6 -5.6
Current Account Balance (% of GDP) -0.9 0.1 1.4 1.3 -1.0
Merchandise Trade Balance (EUR bn) 10.9 16.1 20.8 18.2 17.7
Foreign Direct Investment (EUR bn) 23.7 10.6 5.6 10.2 -1.6

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