According to the NBB's autumn forecasts, the Belgian economy will experience a temporary contraction in the last quarter of 2022, influenced by the energy crisis. However, the economy remains resilient and economic growth is projected to turn positive again as of 2023 as inflation moderates.

Inflation has proved persistent over the past year, rising more sharply than expected, to over 13% in October, mainly due to a surge in gas prices. In November, inflation clearly fell for the first time and price pressures are expected to gradually moderate (further) along with the forecasted decline in international energy prices. That being said, uncertainty remains higher than usual.

As a result of automatic indexation mechanisms in Belgium, high prices also push up labour costs, which are projected to rise by almost 20% by 2025. Such an unprecedented increase in the wage bill threatens the cost competitiveness of Belgian firms.

Finally, the budget deficit is set to remain high in the coming years, rising again from 2023 onwards. Based on a no-policy-change assumption, the deficit is expected to remain close to 5% of GDP in 2025. Public debt is projected to trend upwards.