Belgian economy faces slower growth amid global uncertainty

The Federal Planning Bureau expects the Belgian economy to grow less than previously thought. While a recession is not imminent, lower growth will have a negative impact on the country's budget.

Three months ago, the Planning Bureau forecast growth of 1.3 and 1.6 per cent for 2023 and 2024 respectively, but now it expects the Belgian economy to grow by 1 per cent this year. By 2024, growth would rise to 1.3 per cent, a significant slowdown compared with 2022, when Belgium's economy grew by 3.2 per cent.

This downward revision is a consequence of the gloomier outlook for the global economy and inflation due to rising oil and gas prices. The Planning Bureau expects inflation to reach 4.4 per cent in 2023 and 4.1 per cent in 2024.

Employment on the rise

However, employment is expected to increase by 50,000 this year, and the Planning Bureau expects a further 40,000 jobs to be created in 2024, with the employment rate rising to 72.9 per cent.

The lowered growth outlook also has an impact on Belgium's budget. Financial newspaper De Tijd estimates a deficit of 4.9 per cent of GDP, or 27.9 billion euros, this year. For next year, the deficit would rise to 5 per cent of GDP, or 29.9 billion euros for all governments combined.

^{© BELGA PHOTO ERIC LALMAND}