{ "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Belgium", "publication": "IMF News, March 20, 2025", "sourceUrl": "https://www.imf.org/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium", "canonical": "https://www.imf.org/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium", "overlayPath": "/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/index.md", "summary": "On March 18, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belgium, and considered and endorsed the staff appraisal without a meeting.", "publishDate": "2025-03-20", "sections": [ { "heading": "Executive Board assessment — key findings", "content": "- On March 18, 2025, the Executive Board concluded the Article IV consultation with Belgium and endorsed the staff appraisal without a meeting.\n- The Belgian economy was resilient to a series of shocks, but:\n - Growth has been slowing.\n - Core inflation remains persistent.\n - Labor productivity growth remained sluggish.\n - Labor-cost competitiveness has declined.\n - Successive shocks increased structural fiscal deficits and public debt.\n- Risks: deepening geoeconomic fragmentation and intensification of regional conflicts affecting energy, trade and financial spillovers could worsen the outlook.\n- The policy agenda of the new government, which includes significant structural reforms and fiscal consolidation, is an opportunity to make headway; steady and timely implementation of intended reforms will be key." }, { "heading": "Fiscal policy: recommendations and quantitative targets", "content": "- Judgment: Sustained and significant fiscal consolidation is needed to bring the deficit durably below 3 percent of GDP and put debt on a downward path.\n- Staff supports the government’s intention to pursue a seven-year adjustment under the EGF, accompanied by credible and front-loaded growth-enhancing reforms.\n- Numerical guidance:\n - An annual reduction in the structural primary balance of about 0.6 ppt of GDP until 2031 will be necessary.\n- Design and composition of adjustment:\n - Rationalize current spending and make room for more public investment.\n - Preserve, or ideally increase, public investment to bolster potential growth and support the green transition.\n - Rationalize social benefits and the public wage bill to achieve savings.\n - Improve efficiency of spending, notably in infrastructure, healthcare, and education.\n- Fiscal framework and reforms:\n - Tax reforms should not result in lower revenue while reducing the tax burden on labor, introducing capital gains taxation, and reducing tax expenditure.\n - Support planned reforms to raise effective retirement age and review eligibility to specific pension regimes to preserve pension sustainability.\n - Strengthen the overall fiscal framework via a revitalized fiscal council and greater accountability of the federal and all federated entities in sharing the burden of fiscal adjustment.\n- MTFSP guidance: The forthcoming MTFSP should be built on sufficiently conservative assumptions to lower the risk of deviating from the intended path of deficit reduction." }, { "heading": "Financial sector: assessment and policy stance", "content": "- Overall systemic risks in the financial sector remain moderate.\n- Recommendation: Maintain current capital buffer requirements and prudential limits on mortgage loans.\n- Recent progress is welcome: strengthened systemic risk assessment, supervision, the macroprudential framework, and crisis management and resolution preparedness.\n- With a new government, pending measures that required legislative action should now proceed." }, { "heading": "Labor market, education, and wage-setting reforms", "content": "- Labor market and education reforms are essential to foster higher labor participation and better adequacy of skills.\n- Supported reforms:\n - Widen the income gap between work and nonwork.\n - Limit the duration of unemployment benefits.\n - Reduce the cost of hiring and dismissal.\n- Inclusion priorities: foster a labor market more inclusive of low-skilled workers, older workers, women, and individuals with an immigration background, or disabilities.\n- Policy tools: lifelong learning, reskilling, active labor-market policies.\n- Education reforms: align curricula with skills companies need, better leverage teachers’ time, and strengthen support to students in difficulty.\n- Wage-setting:\n - Automatic wage and social benefit indexation protected household purchasing power during the inflation shock but increased fiscal deficits and undermined competitiveness.\n - Consideration should be given to abolishing automatic indexation and the 1996 wage law; at a minimum, technical reforms to the existing system would benefit the labor market." }, { "heading": "Product markets, EU coordination, and capital markets", "content": "- Further product market reforms and EU-level efforts would support firms’ productivity.\n- Recommended actions:\n - Reduce regulatory and administrative barriers.\n - Improve the insolvency regime.\n - Remove remaining barriers to trade within the EU and harmonize regulations and bankruptcy frameworks.\n - Develop venture capital at the EU level to widen financing options for Belgian firms.\n- These reforms would improve competition, provide buffers against geo-fragmentation risks, and expand market access for firms." }, { "heading": "Climate policy", "content": "- Despite progress, much effort remains needed to achieve climate objectives.\n- Policy recommendations:\n - Complement planned expansion of the EU ETS with carbon taxation and the phasing out of fossil fuel subsidies, while ensuring support for vulnerable populations.\n - Consolidate federal and regional climate efforts into a coherent and cohesive national strategy." }, { "heading": "Selected economic indicators and projections (2022–30)", "content": "- Real economy (Percent change, unless otherwise indicated)\n - Real GDP 1/: 2022: 4.2; 2023: 1.3; 2024: 1.0; 2025: 1.1\n - Domestic demand: 2022: 1.8; 2023: 1.4; 2024: 1.5\n - Private consumption: 2022: 3.6; 2023: 0.6; 2024: 1.2\n - Public consumption: 2022: 3.3; 2023: 3.2; 2024: 1.9; 2025: 1.6; 2026: 1.7\n - Gross fixed investment: 2022: 3.5; 2023: 0.9; 2024: 2.0\n - Stockbuilding 2/ (contribution to GDP growth): 2022: -0.1; 2023: -1.0; 2024: 0.3; 2025: 0.0\n - Foreign balance 2/: 2022: 0.1; 2023: -0.5; 2024: -0.3; 2025: -0.4; 2026: -0.2\n - Exports, goods and services: 2022: 5.8; 2023: -7.1; 2024: -4.0; 2025: 2.6; 2026: 3.1\n - Imports, goods and services: 2022: -6.8; 2023: -4.2; 2024: 0.4\n - Household saving ratio: 2022: 12.7; 2023: 14.1; 2024: 13.6; 2025: 13.7; 2026: 13.8; 2027: 14.0; 2028: 14.3\n - Potential output growth per working age person: (no numeric entries provided)\n - Output gap (in percent): 2022: 0.5; 2023: 0.2\n - Employment: (no numeric entries provided)\n - Unemployment rate (in percent): 2022: 5.6; 2023: 5.5; 2024: 5.7\n - Employment growth: 2022: 0.8\n- Prices\n - Consumer prices (HICP): 2022: 10.3; 2023: 2.3; 2024: 4.3; 2025: 2.2\n - Core CPI (HICP): 2022: 4.0; 2023: 6.0; 2024: 3.4; 2025: 3.0; 2026: 2.1\n - GDP deflator: 2022: 6.8; 2023: 4.5; 2024: 2.7; 2025: 2.5\n- Public finance (Percent of GDP; unless otherwise indicated)\n - Revenue: 2022: 48.6; 2023: 49.1; 2024: 49.6; 2025: 49.5; 2026: 49.7\n - Expenditure: 2022: 52.2; 2023: 53.3; 2024: 54.0; 2025: 54.3; 2026: 55.0; 2027: 55.3; 2028: 55.7; 2029: 56.3; 2030: 56.9\n - General government balance: 2022: -3.6; 2023: -4.4; 2024: -4.8; 2025: -5.5; 2026: -5.8; 2027: -6.2; 2028: -6.7; 2029: -7.2\n - Structural balance: 2022: -4.3; 2023: -4.5; 2024: -6.1\n - Structural balance (excl. Covid measures): 2022: -3.7\n - Structural primary balance: 2022: -2.7; 2023: -2.4; 2024: -2.2; 2025: -2.5; 2026: -3.0; 2027: -3.2; 2028: -3.5\n - Primary balance: 2022: -2.0; 2023: -3.3; 2024: -3.4\n - General government debt: 2022: 102.6; 2023: 103.1; 2024: 104.1; 2025: 105.4; 2026: 108.6; 2027: 111.9; 2028: 115.2; 2029: 118.9; 2030: 123.0\n- External sector\n - Goods and services balance: 2022: -1.5; 2023: -0.6; 2024: 0.7\n - Current account: 2022: -1.3; 2023: -0.7\n- Exchange rates\n - NEER, ULC-styled (2005=100): 2022: 96.3; 2023: 97.6; 2024: 97.8\n - REER, ULC-based (2005=100): 2022: 99.7; 2023: 103.8; 2024: 105.5\n - Euro per U.S. dollar, period average: … \n- Memorandum items\n - Gross national savings (in percent of GDP): 2022: 25.6; 2023: 24.6; 2024: 23.8; 2025: 23.9; 2026: 24.1; 2027: 24.3; 2028: 24.5\n - Gross national investment: 2022: 26.9; 2023: 25.3; 2024: 24.2\n - Nominal GDP (in billions of euros): 2022: 563.5; 2023: 596.3; 2024: 618.6; 2025: 640.9; 2026: 658.7; 2027: 677.3; 2028: 697.8; 2029: 718.4; 2030: 739.8\n - Population (in millions): 2022: 11.6; 2023: 11.7; 2024: 11.8; 2025: 11.9; 2026: 12.0" }, { "heading": "Implementation priorities (policy sequencing)", "content": "- Front-load credible growth-enhancing reforms to accompany the seven-year fiscal adjustment.\n- Prioritize rationalization of current spending, protection and possible expansion of public investment, and efficiency improvements in healthcare, education, and infrastructure investment.\n- Proceed with pending legislative measures to strengthen supervision, macroprudential frameworks, and resolution preparedness.\n- Advance labor-market reforms to increase participation and inclusiveness, and undertake education reforms to better match skills to labor market needs.\n- Coordinate fiscal and climate policy: consolidate federal and regional climate efforts and complement EU ETS expansion with carbon taxation and subsidy phase-out while protecting vulnerable groups.\n- Engage with EU partners to deepen the single market, harmonize regulations and bankruptcy frameworks, and advance the capital market union and venture capital development.\n\nSource: IMF Executive Board conclusions from the 2025 Article IV consultation with Belgium (Executive Board endorsement of staff appraisal concluded March 18, 2025).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Belgium and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium" } ], "bullets": [ "[Markdown version](/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/index.md)", "[Structured JSON version](/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/index.json)", "[Bundle manifest](/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/bundle-manifest.json)", "Published: March 20, 2025", "On March 18, 2025, the Executive Board concluded the Article IV consultation with Belgium and endorsed the staff appraisal without a meeting.", "The Belgian economy was resilient to a series of shocks, but:", "Risks: deepening geoeconomic fragmentation and intensification of regional conflicts affecting energy, trade and financial spillovers could worsen the outlook.", "The policy agenda of the new government, which includes significant structural reforms and fiscal consolidation, is an opportunity to make headway; steady and timely implementation of intended reforms will be key.", "Judgment: Sustained and significant fiscal consolidation is needed to bring the deficit durably below 3 percent of GDP and put debt on a downward path.", "Staff supports the government’s intention to pursue a seven-year adjustment under the EGF, accompanied by credible and front-loaded growth-enhancing reforms.", "Numerical guidance:", "Design and composition of adjustment:", "Fiscal framework and reforms:", "MTFSP guidance: The forthcoming MTFSP should be built on sufficiently conservative assumptions to lower the risk of deviating from the intended path of deficit reduction.", "Overall systemic risks in the financial sector remain moderate.", "Recommendation: Maintain current capital buffer requirements and prudential limits on mortgage loans.", "Recent progress is welcome: strengthened systemic risk assessment, supervision, the macroprudential framework, and crisis management and resolution preparedness.", "With a new government, pending measures that required legislative action should now proceed.", "Labor market and education reforms are essential to foster higher labor participation and better adequacy of skills.", "Supported reforms:", "Inclusion priorities: foster a labor market more inclusive of low-skilled workers, older workers, women, and individuals with an immigration background, or disabilities.", "Policy tools: lifelong learning, reskilling, active labor-market policies.", "Education reforms: align curricula with skills companies need, better leverage teachers’ time, and strengthen support to students in difficulty.", "Wage-setting:", "Further product market reforms and EU-level efforts would support firms’ productivity.", "Recommended actions:", "These reforms would improve competition, provide buffers against geo-fragmentation risks, and expand market access for firms.", "Despite progress, much effort remains needed to achieve climate objectives.", "Policy recommendations:", "Real economy (Percent change, unless otherwise indicated)", "Prices", "Public finance (Percent of GDP; unless otherwise indicated)", "External sector", "Exchange rates", "Memorandum items", "Front-load credible growth-enhancing reforms to accompany the seven-year fiscal adjustment.", "Prioritize rationalization of current spending, protection and possible expansion of public investment, and efficiency improvements in healthcare, education, and infrastructure investment.", "Proceed with pending legislative measures to strengthen supervision, macroprudential frameworks, and resolution preparedness.", "Advance labor-market reforms to increase participation and inclusiveness, and undertake education reforms to better match skills to labor market needs.", "Coordinate fiscal and climate policy: consolidate federal and regional climate efforts and complement EU ETS expansion with carbon taxation and subsidy phase-out while protecting vulnerable groups.", "Engage with EU partners to deepen the single market, harmonize regulations and bankruptcy frameworks, and advance the capital market union and venture capital development.", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Belgium and the IMF](http://www.imf.org/external/country/BEL/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/index.md", "json": "/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/index.json", "bundleManifest": "/en/news/articles/2025/03/19/pr25070-belgium-imf-executive-board-concludes-2025-article-iv-consultation-with-belgium/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T03:41:34.962Z" }