After the sky-high inflation rates recorded last year, inflation is expected to slow this year but will still be high at 4.5%, according to an economic outlook prepared by the Federal Planning Bureau. Not until 2025 is inflation projected to fall below 2%.
Economic growth is expected to strengthen in 2024 and reach an average of 1.4% in 2025-2028, but projections show that public debt will swell to 119% of GDP by 2028.
The war in Ukraine, together with the sharp rise in natural gas and electricity prices, drove up Belgian consumer prices last year. However, fears of crippling gas supply problems abated at the end of 2022 and consumer prices for energy have been falling significantly, helping put the brakes on inflation.
The Planning Bureau forecasts that total inflation will reach 4.5% in 2023, fall to 2.9% in 2024 and drop further to 1.7% per year on average from 2025 to 2028.
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Belgium's economy is expected to grow by 1% in 2023, as inflation slows. It should then strengthen to 1.7% in 2024, driven by a recovery in business investment and purchasing power, before averaging 1.4% over the period 2025-2028.
The forecasts also point to less sustained employment growth than in the last six years, but the employment rate is nevertheless expected to rise to 74.4% in 2028 – up from 72.0% in 2022 – with employment numbers increasing by 236,000 in 2023-2028.
