Belgium: Economic and Political Overview
In this page: Economic Outline | Political Outline
Situated between the UK, Germany and France, Europe’s three main economies, Belgium benefits from a strategic geographical position. Despite facing global economic challenges, Belgium's economy displayed remarkable resilience in 2023, with GDP growing 1.4%. However, growth in the first half of 2024 was subdued, mainly due to weak domestic demand. Private consumption rose only moderately, hindered by declining purchasing power and slow employment growth. While business investment grew significantly, driven by exceptional transactions, household investment remained constrained. For the year as a whole, the IMF estimated a 1.1% rise in economic activity. Private consumption is expected to rise moderately over the forecast horizon, reflecting modest disposable income growth. Despite declining, the saving rate should remain high in 2025-26 due to weak consumer confidence. Business investment will continue to grow at a slower pace, supported by lower financing costs and improved external demand. Overall, investment is projected to increase by 1.8% in 2025 and 1.9% in 2026, bolstered by the RRP (EU Commission). GDP growth is forecast at 1.2% this year, and 1.3% in 2026 (IMF).
In 2024, the government budget deficit increased to 4.6% of GDP. Savings from phasing out energy price mitigation measures and competitiveness support (0.4% of GDP) were offset by a rise in structural spending and slower revenue growth from indirect taxes. The increase in expenditure was driven by ageing-related costs, public debt interest, and higher government investment. In 2025, the deficit is expected to rise further to 45.2% of GDP, as no major new measures are planned (IMF). Expenditure on social benefits will continue to grow, and interest costs will increase due to higher debt levels and refinancing rates, despite falling interest rates. These increases will be partly offset by a moderation in government investment after the election year. In 2024, general government debt increased moderately to around 103.4% of GDP, mainly due to a debt-reducing stock flow adjustment from the lower balance of short-term state notes. In 2025 and 2026, debt is projected to rise more rapidly to 107.2% of GDP (EU Commission forecast), driven by the government deficit, despite the fact that federal and regional governments have recently taken steps toward consolidation and sovereign bond spreads have remained stable. Meanwhile, the withdrawal of energy support measures drove inflation up to 4.3% in 2024 (from 2.3% one year earlier) but easing inflationary pressures over the forecast horizon are set to bring inflation down to 2.1% in 2025 and 2% in 2026 (IMF).
Employment growth slowed in the first half of 2024, mainly due to declines in the industrial and retail sectors. It remained sluggish in the second half, reaching just 0.3% for the year. Employment is expected to increase steadily in the coming years, with the rise in the retirement age likely to boost labour market participation, while the unemployment rate is projected to remain stable at around 5.7%. Wage growth, driven by automatic wage indexation, is expected to slow due to the anticipated deceleration of inflation. The low labour market participation rate remains a major challenge for Belgium in the coming years, with unemployment disproportionately affecting young people, non-European immigrants and the region of Wallonia as a whole. Overall, Belgian citizens enjoy a high GDP per capita, estimated on average at USD 58,256 by the IMF for 2025.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 632.40 | 662.18 | 689.36 | 712.13 | 731.86 |
| GDP (Constant Prices, Annual % Change) | 1.4 | 1.1 | 1.2 | 1.3 | 1.3 |
| GDP per Capita (USD) | 53,854 | 56,129 | 58,248 | 60,002 | 61,453 |
| General Government Balance (in % of GDP) | -4.6 | -4.6 | -5.2 | -5.4 | -5.7 |
| General Government Gross Debt (in % of GDP) | 105.2 | 105.0 | 107.1 | 109.8 | 112.7 |
| Inflation Rate (%) | 2.3 | 4.3 | 2.1 | 2.0 | 2.0 |
| Unemployment Rate (% of the Labour Force) | 5.5 | 5.7 | 5.7 | 5.6 | 5.5 |
| Current Account (billions USD) | -6.13 | -2.15 | -0.20 | 1.95 | 3.59 |
| Current Account (in % of GDP) | -1.0 | -0.3 | -0.0 | 0.3 | 0.5 |
Source: IMF – World Economic Outlook Database, Latest data available.
Note : (E) Estimated data
Belgium’s strategic geographical position, its highly developed transport infrastructure, the wide range of services and its influence in industry and high tech have contributed to the development of its economy. Agriculture contributes a small amount of the national GDP (0.8%) and employs 1% of the active population (World Bank, latest data available). The main crops are sugar beets, vegetables and fruits, meat and milk. According to data by StatBel, weather conditions, particularly the abundance of rainfall, had a definite impact on the economic situation of Belgian agriculture in 2024. They disrupted all stages of field crop production, with significant repercussions for both sowing and yields, while price rises could not compensate for the loss of income. However, net value added in the agricultural sector was estimated to increase by 4.2%. On the one hand, the production value of the agricultural sector was projected to decrease by 0.7% compared to 2023, but on the other, intermediate consumption was anticipated to fall by 2.7%.
The industrial sector accounts for 18.5% of GDP, employing 19% of the workforce. There are significant discrepancies between the three Belgian regions: while Flanders has succeeded in developing the second-largest petrochemical industry in the world, Wallonia is in the middle of restructuring, following the closure of its collieries and a large number of steel plants. Brussels distinguishes itself in the areas of telecommunications, software development and the pharmaceutical and automobile industries. Despite a decline in its contribution to GDP in recent years, the manufacturing industry remains important for the Belgian economy, accounting for 11%. The latest data from StatBel shows that the total value of Belgian industrial production decreased from EUR 216 billion in 2022 to 196 billion in 2023, representing a 9% decrease on an annual basis. In the same period, the largest total value was recorded by the manufacture of food products. Chemical products, basic pharmaceutical products and pharmaceutical preparations rounded out the top three largest industrial sectors.
The country’s economy is largely oriented towards services. In fact, the tertiary sector accounts for 71.1% of the GDP and employs 79% of the active population. Brussels, the hub of several European institutions, numerous diplomatic representations and different interest groups, has essentially based its economy on services. Tourism is also an important sector of the economy: a total of 44,696,602 overnight stays were recorded in Belgium in 2023, representing a 4% increase compared to 2022 and a 5% rise compared to 2019. Concerning the banking sector, the Belgian banks’ total assets on a consolidated basis stood at EUR 1,156 billion at the end of 2023 (European Banking Federation, latest data available).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 1.1 | 19.4 | 79.5 |
| Value Added (in % of GDP) | 0.8 | 18.5 | 71.1 |
| Value Added (Annual % Change) | 2.1 | 0.2 | 1.3 |
Source: World Bank, Latest data available.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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