Belgium: Selected Issues

IMF Staff Country Reports, March 20, 2025

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Belgium: Selected Issues

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Bibliographic details

• Published: March 20, 2025
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798229005296.002

Overview

• Publication date: March 20, 2025
• This Selected Issues paper examines interconnected challenges in Belgium: increasing public investment, fostering digitization, and supporting the green transition within a framework of fiscal consolidation.
• Key cross-cutting themes: coordination and burden sharing of fiscal consolidation and public investment among federal and federated entities; clearly defined and communicated national goals to anchor firms’ expectations and guide long-term strategies and investments; reallocating subsidies from fossil fuels to green investment and renewable adoption.

Fiscal coordination and public investment

• Findings:
  • There is significant scope to improve the coordination and burden sharing of fiscal consolidation and public investment among federal and federated entities.
  • Clearly defined and communicated national goals would help anchor firms’ expectation and guide their long-term strategies and investments in line with sustainability objectives.
• Implications:
  • Better coordination across government layers is needed to align fiscal consolidation with growth-enhancing public investment.

Green transition and energy

• Findings:
  • Fostering higher public investment in the green transition requires harmonizing energy policies, delivering clear market signals, and phasing out or repurposing fossil fuel subsidies.
  • The energy sector faces challenges due to high greenhouse gas emissions and reliance on fossil fuels, necessitating increased public investment to support clean energy initiatives.
• Policy directions:
  • Reallocate funds from existing subsidies for fossil fuels to green investment and measures that support renewable energy adoption and technological innovation.
  • Harmonize energy policies to provide clear market signals that encourage private investment in the green transition.

Digitization and infrastructure

• Findings:
  • Belgium has significant opportunities to enhance its digital and energy infrastructure, which are critical for closing competency gaps and achieving a successful green transition.
  • Enhancing digital infrastructure is linked to productivity gains and supports the broader transition to sustainable technologies.
• Implications:
  • Public investment in digital and energy infrastructure is a priority to close competency gaps and support technological adoption across firms and sectors.

Policy recommendations (summary)

• Improve coordination and burden sharing of fiscal consolidation and public investment across federal and federated entities.
• Define and communicate national sustainability and investment goals to anchor firms’ expectations.
• Harmonize energy policies and deliver clear market signals to foster private sector green investment.
• Phase out or repurpose fossil fuel subsidies and reallocate those funds toward renewable energy adoption and technological innovation.
• Increase public investment in digital and energy infrastructure to close competency gaps and support the green transition.

Content in this bundle

• Belgium: Selected Issues; IMF Country Report No. 25/70; March 3, 2025
  • Belgium: Selected Issues; IMF Country Report No. 25/70; March 3, 2025 (Markdown version)
  • Belgium: Selected Issues; IMF Country Report No. 25/70; March 3, 2025 (PDF)