According to estimates by the Belgian governmental Planning Bureau, the country’s economy should bounce back to the level it had before the pandemic the started by the of 2021.
The latest forecast predicts a 5.7% GDP growth this year and 3% in 2022. During 2021 and 2022 payroll employment increased by 73,000, while the number of people unemployed has dropped by almost 26,000 so far in 2021.
Inflation is expected to reach 1.9% this year and 2.1% in 2022, partly driven by higher energy prices. In 2022, energy prices are expected to gradually decline, leading to lower inflation.
The federal government is currently in the process of pursuing several recovery-oriented reforms, which include projects approved under the European recovery plan, and a new contested pension proposal.
Speaking to The Brussels Times earlier in summer, Macroeconomics professor emeritus Willem Moesen at the Catholic University of Leuven emphasised the need for restoring sound public finances.
“Secondly, we need to finalise the tax reform," Moesen said. Regular current expenditure should be covered by tax revenues and in balance. The tax reform initiated by previous governments was poorly designed and implemented, resulting in a substantial deficit. Tax payers didn’t see any difference and improvement.”
With a government debt to GDP ratio at 116%, Belgium's structural deficit is higher than the average in the euro zone.
The Brussels Times