Economic projections for Belgium

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

Webinar: Economische projecties najaar 2023 / Projections économiques automne 2023

The forecasts for Belgium are compiled as part of the macroeconomic projections produced by Eurosystem and ECB staff. They are based on technical assumptions and international forecasts formulated jointly by the ECB and the national central banks of the euro area. They take into account only measures that have been – or are very likely to be – formally adopted and for which, on the cut-off date of the projections, implementing arrangements have been set out in sufficient detail. The projection period runs to year t+3 (in this case, until 2026). The margin of error is wider for later years, due in part to greater uncertainty regarding the assumptions, especially those relating to the international environment.

The latest projections for Belgium were finalised on 30 November and published on 18 December 2023. The corresponding projections for the euro area can be found on the ECB’s website.

As predicted, the Belgian economy continued to grow fairly robustly this past year, clearly outperforming the euro area average. According to the NBB’s autumn forecast, the Belgian economy continues to grow at a rate of around 0.3% on a quarterly basis. As a result, annual growth should come in at 1.5% for 2023 and moderate somewhat to 1.3% on average in the coming years. This is more in line with potential growth, as the effects of labour shortages make themselves felt. The labour market remains indeed tight with a very low unemployment rate of around 5.5%. Inflation fell further over the course of the year and even briefly dipped below zero in the autumn. Energy prices are obviously much lower than a year ago, but so-called core inflation has also cooled. Inflation is forecast to temporarily rebound in 2024, however, due to the technical impact of the ending of energy support measures. That being said, it should remain well below 2% in 2025 and 2026. For 2023, the budget deficit is estimated at 4.3% of GDP. With no policy change, the deficit will widen in the coming years to over 5% of GDP by 2026. In this case, public debt will be on an upward trajectory.

Projections for Belgium: overview of the main results

 

2022

2023e

2024e

2025e

2026e

Real GDP
(percentage change)

3.0

1.5

1.3

1.2

 1.3

Domestic employment
(average year-on-year change, in persons)

103,700

44,700

37,400

34,000

 32,700

Unemployment rate
(as a % of the labour force)¹

5.6

5.6

5.5

5.5

5.6

Inflation
(HICP - percentage change)

10.3

2.3

4.0

1.8

 1.4

Government budget balance
(as a % of GDP)

-3,5

-4.3

-4.4

-4.8

 -5.2

Public debt
(as a % of GDP)

104.3

105.3

105.2

107.2

109.6

Source: NBB.

1 Population aged 15-64, gross data.

Cut-off date: 30 November 2023. Next publication: June 2024.