Easing administrative burdens and simplifying entry regulation in professional services, retail and network industries and streamlining the insolvency regime would boost competition and productivity growth. Further reducing the tax wedge on labour, particularly for the low-skilled, would encourage employment. Improving teacher training and attracting the best teachers to schools with high concentrations of disadvantaged students would raise skills and reduce inequality.
Economic growth is projected to slow to around 1¼ per cent in 2019 and 2020 as export growth weakens. Private consumption will be an important driver of growth, owing to employment gains and increased purchasing power of households. Government investment will be strong in 2020, and private investment will support growth over the projection period. Headline inflation will ease as past pressures, such as rising electricity prices, dissipate, but core inflation will edge up.
A sound macroeconomic policy framework, high quality education and a combination of market-based policies and a redistributive welfare state have boosted GDP per capita to well above the OECD average. Although growth weakened since the global financial crisis, Belgium ranks among the ten most competitive countries in Europe. The financial sector has recovered from the severe shock which hit the banking system in the aftermath of the financial crisis, aided by government bailouts and new prudential measures. Belgians enjoy high well-being in many dimensions, notably worklife balance, health, education and civic engagement. Income inequality after tax and transfers is comparatively low. Belgium has the lowest gender wage gap among the OECD countries.