Belgium Economic Snapshot
Economic Forecast Summary (December 2021)
Private consumption and business investment are set to continue driving a robust economic rebound. GDP growth is projected to reach 3.2% in 2022 before reverting towards potential at 1.4% in 2023. The labour market has recovered, with the unemployment rate expected to peak at 6.6% in 2022 and then decline. Labour and skill shortages in key sectors could weigh on growth. Inflation is edging up and rapidly rising energy prices could fuel wage inflation through indexation.
Reform Priorities (April 2021)
Going for Growth 2021 - Belgium
Improving business dynamism will be key to revive productivity growth and job creation in recovery. Reforms are hence needed to lower barriers to entry but also smooth the restructuring of firms and exit of non-viable ones. A more flexible labour market and activation policies will ensure the conditions for productive firms to grow and increase inclusiveness.
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2021 Structural Reform Priorities
- Competition and regulation: Streamline regulations that hamper business dynamism and productivity growth
- Competition and regulation: Make the insolvency regime more conducive to reallocation of resources and productivity growth
- Labour market: Strengthen active labour market policies and training to reduce job-skill mismatch
- Labour market: Make wage setting more flexible
- Tax system: Reduce labour taxes to support employment
Economic Survey of Belgium (February 2020)
The latest OECD Economic Survey of Belgium notes that robust job creation, albeit mostly in low-wage industries, has led to the unemployment rate falling to a historic low. Economic growth has been steady, but remains below average euro area levels, and productivity growth has stagnated. Future reforms should seek to lower employment barriers to disadvantaged groups, help innovative businesses to thrive, and further ease pressures on public finances.