Belgium city from above

Belgium Economic Forecast

Belgium Economic Outlook

Seasonally adjusted quarter on quarter GDP growth slowed to 0.2% in Q2 from 0.4% in the previous quarter. The headline figure was negatively impacted by weakening private consumption, fixed investment and exports. Meanwhile, public spending contracted at a more moderate rate. In Q3, the economy is expected to grow at a similar pace to Q2. In July–August, consumer sentiment averaged higher than in Q2, which—together with a tight labor market, wage indexation and decreasing price pressures—should have supported consumer spending. Additionally, government spending is likely to rise in the run-up to elections set for June 2024. However, there was a broad deterioration in business confidence in July–August, while goods exports contracted at a sharper pace in July than in Q2. The latter was likely driven by the weak momentum of trading partners and a loss of competitiveness due to wage indexation.

Belgium Inflation

Harmonized inflation rose to 2.4% in August (July: 1.7%). Price pressures for transportation picked up, while housing and utilities prices fell at a more moderate pace. Average inflation should fall this year compared to 2022 on higher interest rates and a tougher base of comparison. The impact of wage indexation on core inflation is a key factor 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) 460 479 460 503 549
GDP per capita (EUR) 40,359 41,784 39,909 43,489 47,294
Economic Growth (Nominal GDP, ann. var. %) 3.4 4.0 -3.9 9.3 9.3
Economic Growth (GDP, ann. var. %) 1.8 2.3 -5.4 6.3 3.2
Domestic Demand (ann. var. %) 2.6 1.9 -5.8 5.7 3.1
Private Consumption (ann. var. %) 1.9 1.7 -8.3 5.5 4.1
Government Consumption (ann. var. %) 1.6 2.3 0.1 5.0 3.1
Fixed Investment (ann. var. %) 3.0 5.0 -5.3 5.1 -0.8
Exports (G&S, ann. var. %) 1.1 2.4 -5.0 11.3 5.1
Imports (G&S, ann. var. %) 2.0 2.0 -5.6 10.7 4.9
Industrial Production (ann. var. %) 1.2 4.8 -3.8 16.8 -0.7
Disposable Income (ann. var. %) 1.1 2.5 0.6 2.0 -
Unemployment (% of active population, aop) 6.0 5.4 5.6 6.3 5.6
Fiscal Balance (% of GDP) -0.9 -2.0 -9.0 -5.5 -3.9
Public Debt (% of GDP) 99.9 97.6 112.0 109.1 105.1
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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