Belgian employees' wages may increase earlier than expected this year, as the Federal Planning Bureau expects the country's consumer price index to exceed the target in June.
The new forecast for June comes a month earlier than expected, as the index was initially predicted for July, according to the latest inflation forecasts published on Tuesday.
The index is a threshold that determines when social security benefits and public sector wages are adjusted for inflation. If the average of the health index over the last four months (known as the "smoothed" health index) exceeds this figure, wages and benefits increase by 2%.
As a result of the expected exceedance in June, most people's wages will see this 2% increase sooner than expected – in July or August, depending on their situation.
Employees in cement factories, gas and energy companies, and the petroleum industry will already see their wages rise in June, thanks to the automatic wage indexation system. An even larger group of employees (including workers in the construction, metal and cleaning sectors) will see an increase in July.
Employees in the non-profit sector will also see their wages rise one month earlier than expected (July or August, depending on the joint committee). Lastly, those receiving social security benefits as well as civil servants will only see this rise in September, as it takes three months before government payments factor in inflation.
War in the Middle East
Normally, the so-called "cent index" would apply by the time the indexation happens.
This "cent index" is part of the Federal Government's budget plan, and means that people's wages will only be indexed up to a gross amount of €4,000 (or €2,000 for benefits). In practice, that means that should someone earn more than that, the amount over €4,000 would not be indexed.
The Planning Bureau expects the index to be exceeded a second time this year in December 2026, and again in August 2027.
For the whole of 2026, the Planning Bureau is forecasting an average inflation rate of 3.5% – up from the previous forecast in April, which was based on an average inflation rate of 3.2% and was already a significant rise compared to the start of this year.
The reason for this is the war in the Middle East, which has, among other things, made energy considerably more expensive.
At the end of April, inflation came in much higher than predicted: it stood at 4.01%, whereas the Planning Bureau had forecast inflation of 3.16%.
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In its latest forecasts, the Planning Bureau expects inflation to remain above 4% for a full year, with the exception of July (3.92%). The peak is expected to be reached in January, with an inflation rate of 4.57%.
Inflation would not begin to fall until April 2027 (2.81%), but would still remain above 2% for a full year. For the whole of 2027, the Planning Bureau expects an average inflation rate of 3%.
The health index, which is used to index rent prices, is expected to grow by an average of 3.2% this year and 3.3% next year, according to the Planning Bureau.
The latest forecasts took into account an average oil price (Brent) of $96 per barrel this year and $79 per barrel next year. Brent crude cost more than $110 per barrel on Tuesday.
