Economic growth expected to remain robust, headline inflation to rebound temporarily

As forecast, Belgian economic growth remained relatively strong over the past year. Growth was well above the average for the euro area. According to the NBB’s autumn projections, the Belgian economy is expected to continue growing at a quarterly rate of close to 0.3%, implying an annual growth rate of 1.5% for 2023, and then to moderate slightly to return to an average of 1.3% in the coming years.

Headline inflation continued to fall and even briefly turned negative in the autumn, as we predicted. Energy prices are now much lower than a year ago, but so-called core inflation has also slowed.

Lastly, the budget deficit widened again in 2023 and is expected to remain too high in the coming years. It is projected to exceed 5% of GDP again in 2026, assuming no policy change. Public debt is therefore set to be on an upward trajectory, which is unsustainable over time.