Economic projections for Belgium

Twice a year, the National Bank publishes economic projections for Belgium. The main takeaways are presented below. These projections are discussed in more detail in the Economic Review.

Eindjaar2022

The forecasts for Belgium are compiled as part of the joint Eurosystem projections. They are based on technical assumptions and international forecasts formulated jointly by the ECB and the euro area central banks. They only take into account measures that have been – or are very likely to be – formally approved and for which implementing arrangements have been set out in sufficient detail on the cut-off date of the projections. The projection period runs to year t+3 (in this case, up to 2025). The margin of error is wider for later years, due in part to greater uncertainty about the assumptions, especially those relating to the international environment. Owing to a clack of clarity regarding how the war in Ukraine will evolve, the resulting economic sanctions and the impact thereof on the international energy and raw materials markets, these projections are subject to even more uncertainty than usual.

The latest projections for Belgium were finalised on 30 November and published on 19 December. The corresponding projections for the euro area can be found on the ECB’s website

The Belgian economy is expected to experience a short-lived contraction in the last quarter of 2022, influenced by the energy crisis. That being said, the economy remains resilient, and economic growth should pick up again in 2023 as inflation moderates. All in all, the annual growth rate is expected to be 3.1% for 2022 and to fall temporarily to 0.6% in 2023. Growth is projected to rebound to 1.7% in 2024 and to 1.8% in 2025. The labour market remains very robust, but job creation will probably slow somewhat. The unemployment rate continues to be very low, near 6%. Inflation has risen due to mounting energy prices and second-round effects but has declined for the first time again in November. Headline inflation should gradually fall, from an average of over 10% in 2022 to 1.1% in 2025, as energy prices (continue to) moderate. For 2022, the budget deficit is estimated at 4.3% of GDP. As from 2023, the deficit should start to widen again and, under a no-policy-change assumption, will (still) be close to 5% of GDP in 2025. Public debt is also on an upward trajectory.

Projections for Belgium: summary of the main results

 

2021

2022r

2023r

2024r

2025r

Real GDP  
(percentage changes)

6,1

3,1

0,6

1,7

 1,8

Domestic employment   
(average annual change, in persons)

90800

104700

26000

21300

 41500

Unemployment rate
(in % of the labour force)¹

6,3

5,7

6,2

6,3

6,0

Inflation
(HICP – percentage changes)

3,2

10,4

4,4

2,4

 1,1

Overall balance of general government
(in % of GDP)

-5,6

-4,3

-5,3

-4,9

 -4,9

Public debt
(in % of GDP)

109,2

105,2

108,1

109,9

111,8

Source: NBB

1 15-64--year-olds, gross data

Cut-off date: 30 November 2022. Next publication: June 2023.