The Belgian economy took a turn for the better in 2014 though several years of stagnating activity have left their mark. GDP growth is expected to accelerate thanks to company investments and external trade. Price pressures have been abating since 2012 and this downward trend is set to continue, with inflation turning negative in the first half of 2015. The current account is returning to surplus despite a continuing goods balance deficit. The slow-moving recovery and the legacy of a prolonged crisis make for a muted labour market turnaround. The fiscal deficit is expected to narrow again and the rising trend of public debt is expected to come to a halt, but debt reduction is hampered by low growth and inflation.
Belgium is experiencing macroeconomic imbalances, which require policy action and monitoring. Developments with regard to the external competitiveness of goods continue to present risks and deserve attention as a renewed deterioration would threaten macroeconomic stability. Further action to ensure convergence of cost parameters would slow down the decline of employment in the tradable sectors while tangible progress to narrow the historic cost gap could be reinforced by a tax shift towards non-labour tax bases. Public debt remains high but several factors temper associated macroeconomic risks.
Read a complete analysis of Belgium's economy in the country report 2015 [2 MB]
2015 recommendations in brief
The Commission has made four country-specific recommendations to Belgium to help it improve its economic performance. These are in the areas of: public finances and pensions; taxation; labour market; wage-setting.