The Belgian economy held up slightly better than expected in the first few months of 2023, but this economic rebound may not last, given persistent inflation and declining business competitiveness.
This is one of the findings of a survey of sector federations published on Tuesday by the Federation of Belgian Businesses, FEB.
From the normalisation of supply chains to falling gas, electricity and commodity prices, a series of factors have had a favourable influence on the European economy in recent months, the survey notes.
Belgium has also managed to pull through. It has even fared better than Germany or the UK, “thanks to the relatively generous compensation for the rise in energy prices (VAT reductions, basic package…) and the generalised system of automatic wage indexation,” the FEB observes.
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However, there is a downside: “In 2022-2023, wage costs reportedly rose by around 5% more than in our three neighbouring countries, with all the consequences that implies for Belgian businesses.”
As a result, “a third of our sector federations are expecting a further fall in their activity over the next six months, and half of them are forecasting stagnation,” the employers’ federation noted, pointing to the decline in exports (-0.5%) and the fall in planned investments.
