Belgium saw "unprecedented" job growth last year, according to a recent analysis by the National Accounts Institute (NAI). The report noted that a record 103,700 net jobs were created in Belgium in 2022.
The number of salaried employees grew by 85,700 while the number of self-employed professionals rose by 17,900.
Most jobs were created in the hospitality sector, in particular the hotel, catering, cultural, and leisure services. The NAI also reported strong employment growth in the pharmaceutical industry as well as the information and communication technology (ICT) sectors.
Overall, the Institute concluded that economic activity in Belgium was "relatively robust" in 2022. It added that the country's annual growth rate of 3% was the result of "two opposing forces, namely continued catch-up in certain industries that had not yet fully recovered from the two-year pandemic and, on the other hand, a more widespread slowdown caused by the downturn in world trade and acute inflationary pressures."
An uneven performance
Not all sectors of the Belgian economy performed as well as each other, however. In particular, economic activity in Belgium's construction sector fell by 2.4% while non-food-based manufacturing declined by 2.0%.
The NAI also reported that investment in residential property fell by 3.2%, as rising mortgage rates and high prices for raw materials made the real estate sector increasingly financially unappealing.
More promisingly, the report noted that Belgium's budget deficit fell to 3.5% of annual GDP last year, down from 5.4% in 2021. It attributed the decline to the government's phasing out of financial support for businesses and households following the end of the Covid-19 pandemic.
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Despite the budgetary improvement, it is highly unlikely that Belgium's deficit will drop below the EU's 3% threshold before 2024. Indeed, a recent analysis by the European Trade Union Confederation (ETUC) found that Belgium must reduce its budget by a staggering €2.7 billion next year to comply with the EU's fiscal rules.
However, the budget cuts recently announced by Belgium's Federal and Regional Governments fall well below this figure: the Federal Government plans to reduce spending by just €1.2 billion in 2024, while the savings announced by the Brussels and Walloon Governments amount to just €200 million and €165 million respectively. The exact scale of the Flemish Government's budget cuts has not yet been revealed.
The EU's 3% fiscal limit was enshrined in the Maastricht Treaty in the 1990s. The threshold was temporarily suspended during the Covid-19 pandemic; the suspension was later extended until 2024 following Russia's full-scale invasion of Ukraine.
