Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Situated between the UK, Germany and France, Europe’s three main economies, Belgium benefits from a strategic geographical position. Despite experiencing a historic recession due to the COVID-19 pandemic, the Belgian economy rebounded strongly in 2021 and the first half of 2022. However, high energy prices, declining confidence and weakening international trade slowed GDP growth in the second part of the year, with the IMF estimating an overall growth of 2.4%. Private consumption is expected to remain weak until mid-2023 despite the automatic indexation of wages, same as for international trade (Belgium is highly exposed to the performance of its main trading partners); thus the IMF forecasts a growth rate of only 0.4% this year before a rebound in 2024 (1.4%).
As the government measures taken to contain the effects of the pandemic weighed considerably less on public finances in 2022, the budgetary cost of measures to mitigate the impact of high energy prices contributed to a high budget deficit (4.8% - IMF). In 2023, the government deficit is forecast at 4.6% by the IMF, although the European Commission expects it to increase to 5.8% amid lower corporate tax revenue, the automatic indexation of public sector wages and social benefits, and a rising interest rate burden. After decreasing to 103.9% in 2022 - from 108.4% one year earlier - the debt-to-GDP ratio is expected to rise to 105.1% of GDP this year and 107.2% in 2024, driven by high budget deficits. Headline inflation reached an unusually high level of 9.5% in 2022 as the sharp increases of wholesale gas and electricity prices have transmitted quickly to retail prices. Both headline and core inflation are projected to remain high in 2023 (4.9%) before subsiding the following year (1.1% as per the IMF forecast, 3.3% according to the EU Commission).
Unemployment decreased to 5.4% in 2022; however, rising uncertainty and the downturn in economic activity may moderate the performance of the labour market, with the level of unemployment floating around 5.6% over the forecast period (IMF). The low labour market participation rate remains a major challenge for Belgium in the coming years, with unemployment disproportionately affecting young people, non-European immigrants and the region of Wallonia as a whole. Overall, Belgian citizens enjoy a high GDP per capita, estimated on average at USD 62,065 by the IMF for 2022.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 524.79 | 594.50 | 582.21 | 624.25 | 642.69 |
| GDP (Constant Prices, Annual % Change) | -5.4 | 6.1 | 3.1 | 0.7 | 1.1 |
| GDP per Capita (USD) | 45,545 | 51,451 | 50,114 | 53,378 | 54,770 |
| General Government Balance (in % of GDP) | -6.5 | -5.2 | -4.8 | -5.2 | -5.5 |
| General Government Gross Debt (in % of GDP) | 112.0 | 109.2 | 105.3 | 106.0 | 108.3 |
| Inflation Rate (%) | 0.4 | 3.2 | 10.3 | 4.7 | 2.1 |
| Unemployment Rate (% of the Labour Force) | 5.6 | 6.3 | 5.5 | 6.0 | 6.0 |
| Current Account (billions USD) | 5.80 | 2.56 | -19.60 | -17.01 | -9.17 |
| Current Account (in % of GDP) | 1.1 | 0.4 | -3.4 | -2.7 | -1.4 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
