New forecasts from the Central Economic Council (CCE), which have been made available to L'Echo, suggest that between 2020 and 2024 Belgian salaries may rise 4.6% more than in neighbouring countries.
At the beginning of September, the CCE had predicted an increase in the wage gap for the year 2022 of around 1.9% between Belgium (where automatic wage indexation is the rule), and its three main neighbours, Germany, the Netherlands and France. But as it became clear this summer that inflation will not fall as quickly as some had hoped, it seems likely that wages in Belgium will continue to be indexed higher, further widening the gap with our neighbours.
As a result, the CCE was asked to update its estimates as often as possible. According to its latest forecasts, the Planning Bureau now expects consumer prices to rise by 9.4% in 2022 and 6.5% in 2023. The CCE has made new calculations based on these new parameters.
Thus, in 2023 the hourly cost of labour in Belgium will increase by 3.1% compared to 1.3% in neighbouring countries. And again by 1.3% against 0.4% in 2024.
Over the period 2020-2024, the CCE calculates Belgium's total wage disadvantage could therefore increase by 4.6%.
- Wage indexations expected to top 10% in January 2023
- Belgium copes better with inflation than neighbouring countries
These figures may still change depending on the economic context, but also on current or future wage negotiations in neighbouring countries.
However, it is an understatement to say that Belgian business leaders are worried. The wage disparity is fuelling major concerns that economic activity will move to neighbouring countries where the cost of labour is lower. This in turn could precipitate significant job losses in Belgium.