PUBLISHED May 28, 2026
The Headline: 1.0 Percent, Consistent and Modest
According to “Nationale rekeningen 2025 — Eerste raming van de jaarlijkse rekeningen”, published by the Instituut voor de Nationale Rekeningen in April 2026, Belgium’s GDP grew by 1.0 percent in volume terms in 2025, broadly matching the 1.1 percent recorded in 2024. Growth was consistent throughout the year — 1.0 percent year-on-year in each of the first three quarters, slowing marginally to 0.9 percent in the fourth quarter. This steadiness is itself somewhat reassuring: there was no sharp acceleration that subsequently reversed, nor any sudden deterioration. Belgium’s economy in 2025 was, in the most literal sense, stable.
Stable, however, does not mean strong. The 1.0 percent growth rate is modest by historical standards and places Belgium in a cohort of slow-growth eurozone economies. It is growth that preserves rather than transforms — enough to keep employment broadly stable and public finances from deteriorating sharply, but not enough to generate the kind of momentum that makes an economy feel healthy to the people living inside it.
Sectoral Origins: Construction Surprises, Industry Stagnates
The sectoral decomposition of Belgium’s 2025 growth contains its most striking data points. The construction sector grew by 3.7 percent in gross value added — a strong performance by any measure, and dramatically stronger than the 1.3 percent recorded in 2024. All three sub-sectors of construction — building construction and property development, civil engineering, and specialist construction — contributed positively to this result.
The paradox of this construction growth number is immediately apparent when set against the spending data: residential investment fell by 8.2 percent. Construction grew strongly, but not because Belgians were building more homes. The expansion must therefore have been concentrated in commercial construction, public infrastructure, and non-residential building — a composition shift that reduces the sector’s contribution to household wealth accumulation and long-term housing affordability.
Industry, by contrast, barely moved — recording growth of just 0.1 percent after contracting by 0.5 percent in 2024. The Belgian manufacturing sector has struggled with competitiveness pressures, energy costs, and weak external demand for the better part of three years, and 2025 offered no meaningful recovery. Services grew by 0.9 percent, led by professional and scientific activities, real estate, healthcare, and information technology. The retail, transport, accommodation and food service complex — which suffered from weak consumer spending through much of the year — made a negative contribution to services growth.
The Spending Side: A Household-Led Economy Under Strain
The expenditure decomposition of Belgium’s 2025 GDP reveals the structural role of different demand components in sustaining growth. Domestic demand grew by 1.3 percent, providing the bulk of the economy’s positive momentum. Within domestic demand, the key driver was private consumption, which rose by 1.7 percent — a solid figure given the headwinds facing households from elevated energy costs, higher mortgage rates, and subdued confidence.
Government consumption also contributed positively, rising by 1.6 percent. Public investment grew by 1.0 percent — significantly less than the 12.6 percent increase recorded in 2024, but positive nonetheless. Business investment rose by 2.3 percent, continuing its broadly supportive trend.
The sharp outlier on the negative side is residential investment, which contracted by 8.2 percent in 2025. This follows a 6.9 percent contraction in 2024, meaning that Belgian residential investment has now fallen by approximately 15 percent over two years — a substantial cumulative correction that reflects the combined impact of higher financing costs, reduced purchasing power among first-time buyers, and general household uncertainty about the housing market outlook. This contraction in housing investment removes a significant multiplier from the economy: when households stop building and renovating, it affects not just construction directly but also materials suppliers, furniture manufacturers, and all the services that accompany household formation and property transactions.
Belgium’s external sector continued to drag on growth in 2025. Goods and services exports fell by 0.3 percent — the second consecutive annual decline after the 1.7 percent contraction in 2024. Imports rose by 0.1 percent. The net export contribution to GDP growth was consequently -0.3 percentage points for the second year running.
Two consecutive years of export contraction is a significant concern for a small, highly open economy like Belgium, where export revenues represent a very large share of GDP. The underlying causes are well documented: weak demand in Belgium’s key export markets — particularly Germany — combined with cost competitiveness pressures that make Belgian goods and services relatively expensive by comparison with competitors. Belgian labour costs, while growing more slowly than in some periods, have been running ahead of productivity growth, which gradually erodes the cost base from which exporters compete.
The 2026 outlook for Belgian exports is further complicated by the Iran War’s impact on global trade volumes, the uncertainty around US tariff policy, and the general weakening of European industrial demand. The April 2026 business confidence survey’s negative readings for the Belgian manufacturing sector’s export order assessments (-32.1) confirm that the deterioration in external demand has continued into the new year.
Belgium’s external sector continued to drag on growth in 2025. Goods and services exports fell by 0.3 percent — the second consecutive annual decline after the 1.7 percent contraction in 2024. Imports rose by 0.1 percent. The net export contribution to GDP growth was consequently -0.3 percentage points for the second year running.
Two consecutive years of export contraction is a significant concern for a small, highly open economy like Belgium, where export revenues represent a very large share of GDP. The underlying causes are well documented: weak demand in Belgium’s key export markets — particularly Germany — combined with cost competitiveness pressures that make Belgian goods and services relatively expensive by comparison with competitors. Belgian labour costs, while growing more slowly than in some periods, have been running ahead of productivity growth, which gradually erodes the cost base from which exporters compete.
The 2026 outlook for Belgian exports is further complicated by the Iran War’s impact on global trade volumes, the uncertainty around US tariff policy, and the general weakening of European industrial demand. The April 2026 business confidence survey’s negative readings for the Belgian manufacturing sector’s export order assessments (-32.1) confirm that the deterioration in external demand has continued into the new year.
Belgian employment grew by 18,700 persons in 2025 — a modest increase, but acceleration from the 12,900 added in 2024. The composition of this employment growth is, however, revealing. Salaried (dependent) employment grew by just 4,800 persons — barely above zero in an economy of this size. The increase in total employment was driven overwhelmingly by the self-employed, who added 13,900 persons.
This pattern — rapid growth in self-employment accompanied by near-stagnation in salaried work — is consistent with an economy where firms are cautious about taking on permanent employment commitments, while individuals are increasingly moving into independent contracting, freelancing, or micro-enterprise activity. The total working hours increased by 0.6 percent, implying a slight increase in average working time per person — consistent with the use of existing workforce more intensively rather than expanding headcount.
At the sectoral level, employment growth was supported by professional services, public administration and defence, education, and healthcare. These are predominantly public-sector or publicly-financed sectors. By contrast, information and communications, retail and transport, construction, and industry all made negative contributions to employment growth. The private sector core of the Belgian economy was, in employment terms, essentially flat.
Belgium’s wage growth in 2025 stood at 3.4 percent for total wage costs — virtually identical to the 3.5 percent recorded in 2024. Private sector hourly labour costs and gross hourly wages both rose by 3.2 percent, in line with the evolution of conventional wages.
This wage growth reflects Belgium’s automatic wage indexation system, which links pay increases to the consumer price index. In a period of elevated inflation, the indexation mechanism delivers real wage protection for workers — it is one of the reasons why Belgian household consumption held up relatively well in 2025 despite the difficult external environment. But it also raises labour costs for employers regardless of productivity developments or competitive conditions, which contributes to the competitiveness pressures visible in the export data.
The total wage bill for the economy grew by 3.4 percent — faster than GDP growth of 1.0 percent — implying a rising labour share of income. For individual sectors struggling with margins, this dynamic adds pressure to an already difficult operating environment.
The 2025 national accounts provide an important baseline for understanding Belgium’s position as it enters 2026. The economy enters the year with housing investment already deeply depressed, exports in their second year of contraction, industry essentially stagnant, and business confidence declining. Against this backdrop, the April 2026 business confidence barometer’s overall reading of -14.2 — well below the long-run average of -5.8 — looks less like a sudden deterioration and more like the continuation of a trajectory already visible in the annual data.
The structural resilience Belgium showed in 2025 — through household spending supported by wage indexation, government investment, and an unexpectedly strong construction sector — may be harder to replicate in 2026. Household confidence is weakening. The construction sector faces a demand expectations collapse in its April survey. And the external environment, complicated by the Middle East conflict, offers less support rather than more.
Belgium is an economy that managed 2025 better than its weak starting conditions might have predicted. Managing 2026 will require the same combination of institutional resilience, automatic stabilisers, and fortunate sector-level timing — and there is no guarantee that all three will be available simultaneously.
Belgian employment grew by 18,700 persons in 2025 — a modest increase, but acceleration from the 12,900 added in 2024. The composition of this employment growth is, however, revealing. Salaried (dependent) employment grew by just 4,800 persons — barely above zero in an economy of this size. The increase in total employment was driven overwhelmingly by the self-employed, who added 13,900 persons.
This pattern — rapid growth in self-employment accompanied by near-stagnation in salaried work — is consistent with an economy where firms are cautious about taking on permanent employment commitments, while individuals are increasingly moving into independent contracting, freelancing, or micro-enterprise activity. The total working hours increased by 0.6 percent, implying a slight increase in average working time per person — consistent with the use of existing workforce more intensively rather than expanding headcount.
At the sectoral level, employment growth was supported by professional services, public administration and defence, education, and healthcare. These are predominantly public-sector or publicly-financed sectors. By contrast, information and communications, retail and transport, construction, and industry all made negative contributions to employment growth. The private sector core of the Belgian economy was, in employment terms, essentially flat.
Belgium’s wage growth in 2025 stood at 3.4 percent for total wage costs — virtually identical to the 3.5 percent recorded in 2024. Private sector hourly labour costs and gross hourly wages both rose by 3.2 percent, in line with the evolution of conventional wages.
This wage growth reflects Belgium’s automatic wage indexation system, which links pay increases to the consumer price index. In a period of elevated inflation, the indexation mechanism delivers real wage protection for workers — it is one of the reasons why Belgian household consumption held up relatively well in 2025 despite the difficult external environment. But it also raises labour costs for employers regardless of productivity developments or competitive conditions, which contributes to the competitiveness pressures visible in the export data.
The total wage bill for the economy grew by 3.4 percent — faster than GDP growth of 1.0 percent — implying a rising labour share of income. For individual sectors struggling with margins, this dynamic adds pressure to an already difficult operating environment.
The 2025 national accounts provide an important baseline for understanding Belgium’s position as it enters 2026. The economy enters the year with housing investment already deeply depressed, exports in their second year of contraction, industry essentially stagnant, and business confidence declining. Against this backdrop, the April 2026 business confidence barometer’s overall reading of -14.2 — well below the long-run average of -5.8 — looks less like a sudden deterioration and more like the continuation of a trajectory already visible in the annual data.
The structural resilience Belgium showed in 2025 — through household spending supported by wage indexation, government investment, and an unexpectedly strong construction sector — may be harder to replicate in 2026. Household confidence is weakening. The construction sector faces a demand expectations collapse in its April survey. And the external environment, complicated by the Middle East conflict, offers less support rather than more.
Belgium is an economy that managed 2025 better than its weak starting conditions might have predicted. Managing 2026 will require the same combination of institutional resilience, automatic stabilisers, and fortunate sector-level timing — and there is no guarantee that all three will be available simultaneously.
