Belgium Economy

Belgium Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax system

Basic data

GDP growth in 2021 reached 6.2%. For 2022, its growth is expected to decrease as a result of increased energy prices and other impacts of Russia’s war against Ukraine and high inflation.

Belgium received EUR billion from EU funds (Recovery and Resilience Facility). 60% will be spent on infrastructure projects and 19% on digitization, with an emphasis on science, research and education. Check ebizdir for economical facts of Belgium.

In 2020, as a result of the pandemic, there was a substantial increase in public debt to 115.2% of GDP. In the years 2021-25, it is assumed to be around 110% of GDP. The pandemic caused lower tax revenues and high public budget expenditures; part of Belgium (Wallonia) also bore the high costs of the 2021 flood. In the next part of 2021, there should be a gradual consolidation of tax revenues.

In 2021, the public finance deficit was 9.0%. Belgium has a long-term high rate of population savings. Other possibilities for capital inflow are foreign investments, which are traditionally high in Belgium. The flexibility of the labor market and the tax burden will be decisive for the future attractiveness of Belgium for foreign investments (the government coalition is preparing reform proposals for both areas). The current tax burden is high (47.2%, the second highest in the EU in relation to GDP). Another factor is political stability, which is threatened by a complex system of federative arrangements and political differences between regions.

Inflation was low in 2021, but its growth in 2022 was among the highest in the Eurozone (9.3% in April 2022). Unemployment was stable, on the contrary, after the relaxation of restrictive measures, a lack of labor force was manifested in many professions.

Belgium takes advantage of its geographical location and quality transport infrastructure and focuses on processing imports into the EU and re-exporting finished products to other countries. 80% of Belgium’s GDP consists of exports of goods and services. The strengths are thus processing, production and distribution, for example in the field of chemical products, transport material, machinery and electrical equipment.

The government program from October 2020 envisages a fundamental transformation of the Belgian economy towards the use of renewable resources. This will bring with it an orientation towards new technologies (e.g. for the use of hydrogen). A fundamental impetus was given by the government’s decision in March 2022 to extend the two newest nuclear reactors and the expected end of operation of the remaining reactors within a 10-year horizon from 2026. Part of this agreement is significant support in the amount of 1.16 billion Euros for the use of renewable energy sources and investments in them over the next three years. Belgium also ranks high in the EU in terms of innovation.

Belgium has a net creditor position relative to the rest of the world. The balance between foreign financial assets and liabilities represented 41.3% of GDP in 2018, which is one of the highest values ​​in the EU. Belgium’s net credit position originates in the private sector, particularly in Belgian households, which in 2018 held gross assets – both foreign and domestic – representing 289% of GDP. (Source: OECD, BNB).

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 1.7 -6.3 6.2 3.9 1.7
GDP/population (USD/PPP) 56,078.20 52,987.40 57,830.00 62,400.00 64,900.0
Inflation (%) 1.3 0.4 3.2 7,8 1.7
Unemployment (%) 5.4 5.6 6.3 6.1 5.9
Export of goods (billion USD) 446.9 419.3 543.7 561.7 565.9
Import of goods (billion USD) 427.8 394.6 508.2 543.5 543
Trade Balance (Billion USD) 3.9 5.3 -6.7 -19.5 -16.5
Industrial production (% change) 4.8 -3.8 16.8 4.6 2.9
Population (millions) 11.5 11.5 11.5 11.5 11.7
Competitiveness 27/63 25/63 24/64 ON ON
OECD export risk ON ON ON ON ON

Source: EIU, OECD, National Bank of Belgium (BNB)

Public finance and state budget

Public finance 2022
State budget balance (% of GDP) -6.3
Public debt (% of GDP) 113.4
Current account balance (billion USD) -3.4
Taxes 2022
AFTER 25%(20%)
F.O 25%-50%
VAT 21%

On April 1, 2022, the government revised the state budget in the context of rising energy prices, the economic consequences of the war in Ukraine and possible new waves of the COVID-19 pandemic. These measures increase the budget deficit to EUR 20.7 billion. The government also decided in April 2022 to provide two reserves of €827 million and €800 million for COVID-19 and the consequences of the war in Ukraine. The impact of the Ukrainian crisis is estimated at EUR 2.26 billion.

The decline in fiscal revenues in 2021 has decreased compared to 2020. To cover expenses, improvements in tax collection and e-commerce taxation are to be used.

The Belgian economy recovered relatively quickly from the COVID-19 pandemic, but its stronger growth from the beginning of 2022 was slowed by the effects of Russia’s war against Ukraine. Instead of the estimated GDP growth of around 6% in 2022, predictions are now around 2-3% growth.

A more pronounced revival of the economy in 2022 will depend on geopolitical developments, the availability and prices of energy and basic commodities, and possibly also on the speed of the transition to renewable energy sources.

Even after the pandemic, Belgium can count on high savings of the population, which can keep household consumption at a stable level.

Industrial production fell in March 2022 after its growth that lasted from December 2020. GDP should return to pre-crisis levels in 2022 and continue to grow at a slower pace.

As a result of the pandemic, there was a further increase in the public debt, a significant reduction of which is not expected in the years 2021-2025.

Certain government obligations (such as loan guarantees) may increase the debt burden, and the cost of servicing that debt may also increase as a result of inflation.

The corporate income tax burden remained at 25%. For companies owned more than 50% by individuals or with low taxable profits, this amount can be reduced to 20%. (Further details on the tax system and variations in the VAT rate are given in section 2.4.)

Banking system

Banking system

Belgium is very liberalized and open.

In addition to the central bank, the Banque Nationale de Belgique (NBB), the Belgian banking system consists of a large number of private banks and savings banks, often capital-linked to the insurance sector.

The four most important – Fortis Banque, ING, KBC Bank and Belfius (formerly Dexia Bank) occupy more than 2/3 share in the sector.

A total of 85 banks (in 2021) operating in Belgium were 80% owned by foreign capital, 20% had a majority Belgian owner.

The banking crisis in Belgium between 2008 and 2011 affected several large banks. The subject of rescue by the state was not only Fortis bank, but also Dexia, KBC and insurance company Ethias.

In the second half of 2011, the state had to completely take over the Belgian part of this group (Dexia Bank Belgique) under state control as part of the rescue of Dexia bank. The immediate steps that followed meant the removal of toxic assets to the so-called bad banks and the renaming of the bank to Belfius.

As a result of the pandemic, banks are reducing their costs, among other things, by massively canceling their branches and reducing their number to an absolute minimum.

5 strongest banks:

  • Fortis BNP Paribas – a subsidiary of the French Paribas Fortis, until now had the most branches of banks operating in Belgium;
  • KBC – the most valuable bank in Belgium in 2020 – was voted “bank of the year 2020” as well as the most innovative bank (according to its response to the pandemic and the quality of online service provision);
  • ING Belgium – a subsidiary of the Dutch ING Group, provides services mainly for identifying clients, including insurance and asset management;
  • Belfius Bank and Insurance – originally Belgian Dexia, now under state control. It focuses on financing investments at the local government level;
  • Euroclear bank, a Belgian financial services company founded in 1968 as part of JP Morgan & Co.

Belgium is also characterized by a large number of smaller players in the banking sector specializing in asset management, investment banking, etc.

Tax system

Due to the four levels of government – ​​national (federal), regional, provincial and municipal – the Belgian tax system is considered very complicated.

Schematically, the Belgian tax system can be divided into 3 categories:

  • federal taxes (VAT, income taxes, excise, registration, inheritance, customs duties)
  • local taxes (environmental protection taxes, energy use taxes, income tax surcharge, etc.)
  • modified taxes (double taxation agreements)

Belgium is the country with the fifth highest tax burden on labor in the EU, with the maximum cumulative amount of personal income tax reaching 74.5% of wage costs.

Personal income tax for 2021:

  • 25% for persons with an annual income of up to 13,540 Euros
  • 40% for persons with an annual income of 13,440–23,900 Euros
  • 45% for persons with an annual income of EUR 23,720-41,360
  • 50% for persons with an annual income of EUR 41,360.

Corporate income tax in fiscal year 2022: 25% (down from 29% in 2020).

Companies owned more than 50% by individuals or with low taxable profits may have this amount reduced. The tax rate for businesses with a taxable income of up to 100,000 euros is 20%.

Companies must pay a surcharge of 6.75% on their final corporation tax bill after it is assessed by the authorities. Companies can avoid this charge by making sufficient tax payments in advance.

In 2020, the Constitutional Court abolished the “fair tax” for large companies, which was a special tax in the total amount of 5.15% (5% plus a crisis tax of 2%).


  • base rate 21%,
  • reduced rate of 12% (restaurants, coal, social housing, etc.), or 6% (medicines, staple foods, books, healthcare, sports, etc. sectors),
  • 0% (periodicals, recycled materials).

The government coalition plans to reform the tax system (its preparation will start in 2022. It should be in force from 2023). Among other things, it will be about favoring the use of renewable resources.

In May 2021, it was decided that from 2026 only electric company cars can be tax-advantaged.

Belgium Economy