Belgian households have seen their purchasing power rise far less than those in neighbouring countries over the past 25 years, according to new data by the IESEG school in France and its Belgian director of Economic Studies, Eric Dor.
Since the introduction of the euro in 1999, Belgium’s per capita purchasing power has grown by just 21.5%, one of the weakest performances in the EU. Over the same period, growth was 40.3% in Luxembourg, 33.8% in France, 32.7% in the Netherlands, and 28.9% in Germany. Only Italy, Greece, and Austria recorded smaller gains.
This measure, known as real adjusted disposable income per capita, reflects the amount households can spend on goods and services after taxes, social contributions, and inflation are accounted for. In other words, it represents how much people can actually buy with their income.
Why is Belgium falling behind?
The main reason lies in weaker growth in primary income, the money households earn before redistribution through taxes and social security. Between 1999 and 2024, Belgium’s real gross primary income per capita rose by only 10.6%, compared with 32% in Luxembourg, 26.4% in France, and 26.3% in Germany.
This stagnation stems from lower job growth and limited wage increases. Belgians worked fewer additional hours per capita than their neighbours over the period, and their average real gross hourly wage, including employer social contributions, grew more slowly than almost anywhere else in the EU. Only Greece and Italy saw weaker wage growth.
The slow wage evolution is partly the result of Belgium’s already high labour costs. “Because wages started from a higher nominal level, there was less room for real increases,” the report notes. Despite that, Belgian workers still had some of the highest nominal wages (amount of money paid to an employee for their labour, without any adjustment for inflation) in Europe in 2024.
Self-employed and property income also decline
Self-employed workers also get by poorly. Their average real income per hour fell over the past 25 years, a decline similar to that observed in France, even though the number of hours worked by the self-employed actually rose. In contrast, countries such as Germany and Luxembourg saw strong gains in this category.
Meanwhile, real household property income per capita (a measure of a household's income from property-related sources divided by the population, adjusted for inflation to show purchasing power over time) fell sharply in Belgium, by nearly 16% since 1999. That contrasts with increases of 60% in Luxembourg and 56% in France. The main culprit: a steep drop in real interest income, which plunged by more than 55%, far more than in neighbouring countries.
Dividends paid by companies to Belgian households did increase, but not enough to offset these losses or to match growth elsewhere in Europe.
Limited role of taxes and benefits
Redistribution through taxes, social security, and benefits played a smaller role in explaining Belgium’s lagging purchasing power. Both taxes paid and social security contributions rose more slowly in Belgium than in most neighbouring countries, largely because employment and wage growth were weaker to begin with.
Social benefits, both in cash (pensions, unemployment aid) and in kind (healthcare, education), did increase in real terms, but at a moderate pace compared with Luxembourg or the Netherlands.
A long-term warning signal
Overall, the figures paint a picture of structural weakness in income growth rather than excessive taxation or poor redistribution. Belgium’s households simply generated less new income, whether from wages, self-employment, or capital, than those in neighbouring economies.
The result: even with strong social protection, Belgian purchasing power has grown far more slowly than in France, Germany, or the Netherlands.
With real household incomes stagnating and inflation still eroding budgets, the challenge for policymakers is clear: revive productivity, employment, and income growth without undermining the country’s competitiveness.
