Belgium: Families saved less last year, according to the National Bank annual report

The budget deficit increased further in 2024, to 4.6 percent of gross domestic product (GDP). The primary expenses increased under the impetus of the greatly rising social expenses. “Unfortunately, that was in line with our expectations. Moreover, the deficits were no longer influenced by crisis measures last year. We have a structural problem, with a faster increase in government spending than in growth. This mainly concerns social expenses, partly due to the aging population, “says Wunsch.

Social expenses

The National Bank also assumes that social expenses will continue to increase sharply in Belgium in the future, and that aging costs in our country will increase stronger in the long term than in neighboring countries. Compared to the Netherlands and Germany, we would agree a little faster, in France the average pension was expected to increase less than with us.

The Belgian government debt increased last year to 104.4 percent of GDP. Such a high government debt makes Belgium vulnerable to loss of trust, the National Bank emphasizes.

Families consumed more

The annual report also showed that last year the families in our country saw their ‘consumer spending’ increasing by almost 2 percent on an annual basis. According to the NBB, it is a clear acceleration compared to the previous year and above the average in the euro area.

Because the consumer spending of the families rose faster than their income, they saved less. The savings ratio fell from 14.1 percent of the available income to 13.6 percent. That is still a high level and more than in the period for the Coronacrisis (between 2010 and 2019, the savings ratio amounted to 12.7 percent), but less than the average in the euro area in 2024.

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The bank loans to households were springing up last year, while according to the NBB, the banks made every effort to recover the savings of the state vessels. “Almost the full 22 billion euros has been returned to the banks, which were quite aggressive to get the deposits back,” said Pierre Wunsch, governor of the National Bank.

Belgian total inflation rose again last year, to 4.3 percent. With that she was at the highest level in the euro area.

Long -term sick and educational quality

To increase productivity and prosperity, according to Wunsch, a rapids are needed for structural reforms. “I will continue to repeat this. The Belgian economy, even though it is fairly open, lacks flexibility and dynamics. There is too little course in the business landscape and our economy suffers from excessive administrative burdens and too many regulations, “says Wunsch.

According to the NBB, the employment scarcity remains an important brake for growth and the employment rate barely increased. Flanders is doing a lot better than Wallonia and Brussels. In Flanders, the employment rate last year was slightly above the European average, but still under the objective of 80 percent.

Wunsch points to the difficult reintegration of the long-term sick in Belgium. Moreover, in ten years their number has increased by 60 percent, to around half a million. “We need a flexible labor market with sufficient supply of suitable workers,” it sounds.

The Governor of the NBB believes that work should pay more and that mobility on the labor market should be promoted. The trend of the falling quality quality must be turned. “And the latter is not just a problem in the south of the country.”

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Nevertheless, despite a large proportion of households with low work intensity, Belgium does not score badly on poverty risk. Flanders is among the best students in the European class with regard to the risk of poverty or social exclusion, but Wallonia and especially Brussels score below the European average.

Worried about descending importance of industry

The falling interest of industry in Belgium deserves special attention, reports the National Bank in its annual report. The rising energy prices and carbon costs weigh on the competitiveness of the processing industry and energy-intensive industries in general, the NBB warns.

To secure the future of Belgian industry, according to the NBB, two structural challenges must be tackled: the high domestic energy prices compared to international competitors such as the United States and China, and the lack of clarity about the availability and costs of The technologies needed to make the carbon -free sector.

“Should we stick to climate goals?”

The Belgian energy-intensive companies are less and less competitive and are in an adverse position compared to their competitors in countries with less ambitious climate objectives, such as the United States.

“Accelerating the climate transition will not help the energy-intensive companies either,” says Wunsch. “That will not lower the prices. Green electricity is much more expensive than cheap American gas. If we want to keep the heavy industry in Belgium, then we have to see what can be done to make those companies breathe again. “

The NBB says that with the current pace, an emission -free economy in net senses will not be achieved anyway. “But do we really have to go to 0 percent for industry? In this context? ”, Wunsch wonders. “If we want to be more ambitious than the US and China, then that will have an impact on our competitiveness. Maybe we should change the gun of shoulder, especially for the sectors that are exposed to international competition? Or do we want to sacrifice part of our energy-intensive companies in the coming years to be able to stick to our climate objectives? ”, Says Wunsch.

World economy stable, despite increased risks

In its annual report, the National Bank also reports that in 2024 the world economy has had a stable year, despite monetary tightening, an uncertain geopolitical situation, a continuation of military conflicts and a threat of increasing commercial restrictions.

Although global growth remained stable at 3.2 percent, there were major differences between the most important economies. The US had an economic growth of 2.8 percent, Brazil of 3.7 percent, the United Kingdom of 0.9 percent, India of 6.5 percent and China of 4.8 percent. Japan had slightly negative growth (-0.2 percent). The euro area had a growth of 0.7 percent, but there were strong differences between the Member States. The Belgian economy grew by 1 percent.

The NBB finds that the trade balans are again in sight of policy makers and wonders if the business model of Europe is “still sustainable in Trump time”. “We go to a world that is different, with much less level playing field”, Says Wunsch. “This is especially important for small Belgium, because we were one of the winners of globalization.”

According to Wunsch, the report of Italian former Prime Minister Mario Draghi with recommendations on the future of European competitiveness generally advocates more European integration and larger investments, but no radical price changes. “We have to be careful that more Europe does not lead to an emperor mentality, with a lot of regulations and a lot of control, with little dynamism at the end of the ride.”

According to Wunsch, the most important recommendation of the Draghi report is that the administrative burden in Europe must be reduced. “That is perhaps the biggest problem we have in Europe and has now at least become negotiable. Europe has gone in overdrive in recent years in terms of imposing rules. Reporting is needed about just about everything. We went too far. “

Wunsch is, on the other hand, less convinced of the call from Draghi to massive investments, at the time of 800 billion euros per year, in public goods. “That is what Biden tried in the United States and it is interesting to see that Trump has won the elections. You risk deficits of labor and material, which increases inflation again. “