Economic projections for Belgium

Twice a year, the National Bank of Belgium publishes economic projections for Belgium. The main results are reproduced here. The results are discussed in more detail in the December 2021 issue of the Economic Review

The forecasts are compiled as part of the joint Eurosystem projections. They are also based on technical assumptions and international forecasts formulated jointly by the ECB and the euro area central banks. They only take account of measures that have been – or are very likely to be – formally approved and for which the implementing arrangements have been set out in sufficient detail at the cut-off date of the projections. The projection period runs to year t+3 (in this case up to 2024). The margin of error surrounding the projections is wider for the later years, partly owing to the greater uncertainty about the assumptions, especially those concerning the international environment. Owing to the uncertainty surrounding future developments with the COVID-19 health crisis and about the revival of demand, these projections come with considerable risks, both upside and downside. 

The latest projections for Belgium were finalised on 1 December 2021 and published on 17 December. The corresponding results for the euro area are published on a dedicated webpage on the ECB’s website

Economic activity in Belgium economy slowed down sharply and is barely expected to grow at all in the short term because of supply problems, rising (energy) prices and a deterioration of the public health situation. As all the various headwinds ease, growth should temporarily see a stronger pick-up again, from the spring of 2022. All in all, economic activity in 2022 is projected to rise by some 2.6 % on an annual basis, after the solid growth of around 6% in 2021. The rate of growth is expected to further normalise over the coming years, to 2.4% in 2023 and 1.6% in 2024. The labour market remains highly robust: job creation slows down but stays in positive territory. The unemployment rate should decline steadily to 5.7% in 2024. Inflation is running high under the impact of rising energy costs and second-round effects but should reach a peak in 2022 (4.9%) before falling back sharply. A long-lasting wage-price spiral is not expected to occur. The budget deficit is estimated at 6.3 % of GDP for 2021 and remains above 4% of GDP at the end of the projection horizon. Government debt is on an upward path.  

Projections for Belgium: summary of the main results

 

2020

2021r

2022r

2023r

2024r

Real GDP  
(percentage changes) 

-5,7

6,1

2,6

2,4

 1,6

Domestic employment   
(average annual change. in persons) 

-800

81 000

44 000

40 700

 38 700

Unemployment rate  
(in % of the labour force)¹ 

5,6

6,3

6,1

5,9

5,7

Inflation  
(HICP – percentage changes) 

0,4

3,2

4,9

1,2

 1,2

Overall balance of general government  
(in % of GDP) 

-9,1

-6,3

-4,2

-4,0

 -4,2

Public debt  
(in % of GDP) 

112,8

108,9

107,4

108,9

111,9

Source: NBB

1 15-64-year-olds, gross data. 

Date finalised: 1 December 2021. Next publication: June 2022