Growth in economic activity reached 1.1%, slightly below potential growth (around 1.3%) but higher than forecast at the beginning of the year. It therefore seems that the economy has been more resilient than expected to the shocks occurring in 2025. Above all, household consumption was particularly buoyant (up 1.8% for the year as a whole in real terms). On the contrary, household investment in new construction will have contracted by a further 9% in 2025. Since the start of 2023, the contraction has exceeded 19%, weighing heavily on activity in the construction sector.
"}},{"componentType":"sectionTitle","title":"Households perspectives 2026"},{"componentType":"paragraph","richBody":{"value":"After accelerating between mid-2024 and mid-2025, household consumption has already begun to slow in the second half of 2025. We expect that the financial situation of households will not improve strongly this year, resulting in slightly weaker consumption growth. Indeed, new government reforms—prompted by deteriorating public finances and the need for labour market changes—will affect household incomes, impacting their purchasing power.
Key measures include:
That said, structural reforms of the labor market (including the limitation of unemployment benefits, but also the extension of flexi-jobs to all sectors and changes to night work) and pensions should gradually have a positive impact on total employment, starting this year.
Nevertheless, given a stabilization in the household savings rate, the brakes on household income growth should keep consumption growth lower.
"}},{"componentType":"sectionTitle","title":"Corporate perspectives for 2026"},{"componentType":"paragraph","richBody":{"value":"At the beginning of last year, exports from Belgium to the USA rose sharply, as US importers anticipated tariff increases. As expected,exports corrected afterwards. According to the latest foreign trade statistics from the National Bank, between September and November 2025, Belgium's exports to the USA contracted by 22% compared to the same period in 2024. Although export flows held up well over the past year as a whole, the latest data suggest that the US market will no longer be a growth driver for foreign trade. Fortunately, other markets have proved more positive in 2025: Italy, Poland, Germany and Spain.
Clearly, for Belgian companies, the geopolitical context and the evolution of international trade will remain challenges this year. After three years of contraction in both exports and imports, we nevertheless expect a slight recovery in Belgium's foreign trade, based mainly on intra-European trade and stronger demand from Germany, whose demand should be boosted by the infrastructure investment plan.
Business investment continued to grow in 2025 (+2.7% in real terms). The same is expected this year. This may seem paradoxical in a context of slow growth and weak demand. It is therefore highly likely that expansionary investments will be more limited. Nevertheless, the need to increase business efficiency and maintain competitiveness means that companies must continue to invest.
Activity in the residential construction sector remains weak, and the flow of building permits does not point to a major improvement in the near future. This is all the more paradoxical given that the secondary real estate market is doing well: the number of transactions is up, as are prices (demonstrating sustained demand), even if the reduction in registration fees in Flanders but especially in Wallonia has played an important role. The causes of the weakness in new construction are well known: rising materials prices, uncertainties over energy performance requirements, and the length of time it takes to obtain building permits. Nevertheless, we remain convinced that activity should start to pick up this year, thanks in particular to the reduced VAT rate (6%) for demolition-reconstruction operations. What's more, the upturn in new construction is essential if we are to bring the supply of housing into line with demographic trends (population growth, and hence demand for housing, shrinking average household size as the population ages, etc.).
"}},{"componentType":"sectionTitle","title":"Public finances"},{"componentType":"paragraph","richBody":{"value":"Belgium has unmistakably entered a period of fiscal restraint. Prime Minister Bart de Wever openly acknowledges the challenge, warning of a difficult decade ahead. With the deficit projected to have exceeded 5% of GDP in 2025, alternatives were limited. While these reforms will gradually benefit public finances and potential growth, the deficit is unlikely to drop below 5% this year and may only stabilize at 4.5% by 2027. The efforts to date are therefore insufficient, leaving Belgium vulnerable to a sovereign rating downgrade—especially as political tensions rise among coalition partners, complicating future negotiations.
"}},{"componentType":"highlight","richBody":{"value":"Inflation normalises
Inflation in Belgium steadily declined throughout 2025, dropping from 4.1% in January to 2.1% by December—primarily driven by falling energy prices. However, food prices temporarily pushed inflation upward, and service costs continued to climb, registering a more than 4% year-on-year increase in December. Policy changes affecting VAT rates, along with rising expenses for higher education, may add to inflation in the coming year. Despite the persistent challenges in certain sectors, overall inflation is expected to remain close to 2% for the year ahead.
Interest rates
We expect ECB rates to remain at 2%, meaning stable short rates on financial markets. Long-term rates could rise a little further this year, notably due to the risk premium associated with Belgium's still deteriorating public finances.
"}},{"componentType":"paragraph","richBody":{"value":"All in all, we expect that Belgian economic growth will remain below the eurozone average in 2026, on the back of less dynamic private consumption and limited public spending and investment.
"}},{"componentType":"paragraph","richBody":{"value":""},"textLinks":[{"text":"For a better understanding of the economic situation, find the analyses from our economists.","url":"/en/individuals/news/economy-and-financial-markets"}]},{"componentType":"sectionTitle","title":"Want to know more?"}]},"hasMacro":false,"id":"fb4e7da3-c799-4ad7-bdfd-6f8adb5a2581","localeString":"en-GB","mainHeaderZone":{"authorInfo":{"authorName":"Philippe Ledent","image":{"extension":"jpg","original":"https://assets.ing.com/m/312f225fb35c4929/original/Philippe-Ledent.jpg","transformBaseUrl":"https://assets.ing.com/transform/66f96412-88c5-462c-b78b-f8866d659734/Philippe-Ledent","type":"image","width":1920},"intro":"Member of ING's economic research department.","jobTitle":"Expert Economist - ING Belgium"},"backLink":{"textLink":{"text":"Economy and financial markets","url":"/en/individuals/news/economy-and-financial-markets"}},"componentType":"editorialHeader","coreHeader":{"headerImage":{"altTextDE":"\"","altTextEN":"\"","altTextFR":"\"","altTextNL":"\"","extension":"jpg","original":"https://assets.ing.com/m/658fda85d54505f3/original/Manneken-pis-statuettes-in-tourist-shop.jpg","transformBaseUrl":"https://assets.ing.com/transform/901888e3-d15b-4f0d-b44f-37687e1f46da/Manneken-pis-statuettes-in-tourist-shop","type":"image","width":4032},"title":"Belgium: Those care-free days are over !"},"date":"2026-01-20","readingTime":3},"publishDate":"2026-01-20T21:57:57.503+01:00"}}