Belgians' purchasing power has largely recovered to levels last seen a year-and-a-half ago, when soaring inflation and high energy prices precipitated a severe cost of living crisis across the European continent.
According to a recent study conducted jointly by Le Soir and the Institute for Sustainable Development (l'Institut pour un développement durable) at the University of Namur, three out of four categories of Belgian households have already regained or exceeded their mid-2021 purchasing power levels.
In particular, employed parent households, civil servants, and retired couples currently enjoy purchasing power which is 102.74%, 102.63%, and 101.93% respectively relative to that experienced in July 2021. Meanwhile, single-parent families' purchasing power is only marginally below what it was before (99.81%).
The recent study follows another similarly optimistic analysis conducted by Belgium's Federal Planning Office (FPO; Bureau fédéral du Plan), which found that real disposable incomes in Belgium should increase by 4.2% in 2023 — a significant improvement on last year's 1.6% decline.
A confluence of factors
According to the study's lead author, Philippe Defeyt, there is no single factor responsible for Belgians' improved financial situation; rather, he argues, it is due to "the combined effects of several phenomena".
Of those causes which had a particularly beneficial impact, Defeyt pointed to the large-scale government-mandated wage indexations implemented earlier this year, as well as the government's decision to cut VAT on gas and electricity from 21% to 6%.
"There is the automatic indexation of salaries, which made it possible to compensate for a good part of the losses," Defeyt explained to Le Soir. "Government aid, such as the flat-rate premium on gas and electricity, also played a major role."
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However, Defeyt stressed that Belgians' financial situation could also worsen considerably in the near future due to the expected introduction of the government's new energy payment plan. The controversial scheme is anticipated to cost the average Belgian family almost €20 a month from its planned implementation on 1 April, or an extra €180 over the course of 2023.
"The end of the energy package and the dismantling of the extension of the social tariff could have negative effects, in particular for the single-parent family," Defeyt noted.