The Belgian economy has remained relatively resilient to recent shocks, including supply bottlenecks and high inflation.

GDP growth should reach 1.4% in 2025.

However, the fiscal deficit and debt are too high.

Greater efficiency in public spending and a wider tax base can help build fiscal buffers.

Reforming the budgetary framework to increase accountability across governments would ease consolidation.

To restore fiscal sustainability:

• Introduce a credible medium-term consolidation strategy.
• Focus the consolidation plan on cutting ineffective spending, using spending reviews in budget processes.
• Resume efforts for a comprehensive tax reform.

In 2023, only around 67% of working-age people were in employment. 

Encouraging greater labour force participation will be critical to address fiscal challenges, reduce inequality, and sustain economic growth. 

To encourage higher employment rates:

• Strengthen in-work benefits for low-paid workers. 
• Withdraw benefits targeted at low-income earners more gradually.
• Improve return-to-work programmes for people receiving long-term sickness and disability benefits.

Administrative burdens and skills shortages can compromise business performance, especially of SMEs. 

To support SMEs:

• Adopt a whole-of-government strategy to reduce administrative costs for businesses.
• Help SMEs develop a training strategy and access existing public programmes.
• Address gender gaps in fields of study relevant for innovative entrepreneurship, including STEM.

Achieving climate and energy transition will require a significant acceleration of emission reductions.

Part of the solution lies in setting more binding climate targets and improving coordination of climate policy across federal and regional governments.

To achieve climate goals:

• Set out clear plans on how climate targets will be met.
• Gradually increase emission prices where they are low.
• Better tune the regulatory framework and financial support for expanding renewable sources.
• Focus support in the building sector on deep renovations and the decarbonisation of heating