Belgium

Moderate growth continues only thanks to stable purchasing power

The Belgian economy is expected to continue growing at a moderate but subdued pace in both 2026 and 2027. Household purchasing power will again be supported by the automatic indexation of wages, pensions and social benefits to the cost of living, which remains a distinguishing feature of the Belgian system. This mechanism should provide an important buffer against rising prices, but its effectiveness will be partly offset by a renewed increase in energy prices which will impact purchasing power in 2026 as it spreads to broader inflationary pressures. These developments will weigh on consumer sentiment. At the same time, fiscal policy offers only limited support. With public finances already under strain, the government has little room to expand spending or to deploy targeted support measures for households, in contrast to its role during recent crises. While Belgian households still hold a relatively comfortable stock of savings, which should cushion the immediate impact of higher prices, a gradual increase in unemployment is expected to undermine confidence and restrain consumption growth. In addition, the continued tightening of both fiscal and monetary policy will further limit real domestic demand in both 2026 as well as 2027, although easing inflationary pressures could support modestly more growth in 2027.

After a prolonged period of margin compression in 2023–24, companies began to see some tentative improvement in profitability, supporting a recovery in private investment. This rebound was helped by the European Central Bank’s (ECB) initial easing of policy rates, which lowered financing costs and supported capital expenditure. Nevertheless, these positive developments proved insufficient to offset the sharp increase in corporate insolvencies observed between 2021 and 2025, with failure rates exceeding pre?pandemic levels by around 10%. Looking ahead, rising operational costs – particularly for energy, intermediate inputs and labour – are expected to weigh increasingly on corporate margins and the indexation will hurt cost competitiveness. In addition, a renewed tightening of ECB monetary policy is likely to constrain financing conditions. Together, these factors are expected to gradually erode profitability, dampen investment activity and drive insolvencies higher in 2026, with elevated levels persisting into 2027. In the construction sector, activity remains particularly subdued: building permits continue to trend at low levels, and the deterioration in sectoral conditions is expected to persist, constraining activity outside the civil engineering segment.

Public spending is expected to make only a limited contribution to growth over the next few years. The new government has signalled its intention to curb the growth of current expenditure through labour?market and pension reforms, as well as by placing partial caps on wage indexation mechanisms. At the same time, expenditure composition is set to shift, with higher public investment providing some support to activity. Steppedup defence spending, alongside sustained investments in the energy transition and digital infrastructure, is expected to underpin some growth. However, the scope for fiscal expansion remains tightly constrained by the EU’s excessive deficit procedure, limiting the government’s ability to offset weaker private?sector momentum. The outlook for exports remains challenging. Belgian external demand continues to be weighed down by the slowdown in the European and global economy, while US tariffs add further pressure to trade?exposed sectors. In addition, the pharmaceutical industry – one of Belgium’s key export drivers – is undergoing a normalisation phase following several exceptionally strong years in the immediate pandemic and post?pandemic period. As a result, export growth is expected to remain subdued, providing only a modest contribution to overall economic activity.

New EU excessive budget procedure is forcing the government to moderate spending

Belgium’s fiscal policy in 2026–27 remains tightly constrained by the EU fiscal framework, following its inclusion in the excessive deficit procedure due to persistent deficits above 3% of GDP. Under the revised rules, the government is required to deliver an average annual deficit reduction of around 0.5 percentage points of GDP, limiting the scope for discretionary fiscal support. The federal consolidation plan presented in spring 2025 aims to reduce the deficit to 3% of GDP by 2030 through a cumulative effort of around EUR 23 billion (3.7% of GDP), relying mainly on structural reforms. These include labour?market and pension reforms – such as capping unemployment benefits at two years and discouraging early retirement – while the automatic indexation of wages and pensions remains unchanged. From 2026, higher revenues are expected from a tax reform, including a new 10% capital gains tax on certain financial assets above an annual EUR 10,000 exemption, alongside savings from institutional reforms. Nonetheless, with federal authorities responsible for only about half of total public spending and limited coordination across regions, fiscal policy is expected to remain mildly restrictive in 2026–27, with support focused mainly on defence, energy transition and digital infrastructure investments.

Belgium’s current account position is expected to improve only marginally over 2026 and 2027. While the goods trade balance may benefit from slightly more favourable terms of trade, export performance remains under pressure from weak European and global demand, ongoing trade uncertainty and US tariffs. In addition, the pharmaceutical sector continues to normalise after several exceptionally strong post?pandemic years. Services exports and primary income should remain supportive, but overall net exports are likely to make only a modest contribution to growth.

Belgium has a stable government for now

Following the 2024 federal elections, in which the right?wing New Flemish Alliance (N?VA) emerged as the largest party, a government was ultimately formed in January 2025 after prolonged negotiations. The resulting five?party coalition – bringing together the N?VA, CD&V (Flemish Christian Democrats), Vooruit (Flemish social democrats), MR (French?speaking liberals) and Les Engagés (Walloon centrists) – has become known as the “Arizona” coalition. Despite its broad ideological spread, the government occupies a largely centrist position and operates under significant constraints, notably the EU excessive deficit procedure and strong opposition from trade unions. Within these limits, the coalition has managed to pass a budget and implement a first set of structural reforms, including changes to unemployment benefits, pensions, elements of wage indexation and the introduction of a capital gains tax, aimed at improving the fiscal outlook. Nonetheless, policy room remains narrow. These measures are expected to only partly offset rising defence expenditures and mounting demographic pressures, while the government’s fragmented parliamentary base limits the scope for further far?reaching reforms.

Institutional reform has met with mixed prospects. The planned abolition of the Senate has attracted relatively broader support across the political spectrum, as several parties have previously advocated such a move. The upper house’s role has diminished markedly over recent decades, with the Senate now meeting only around ten times per year. However, abolishing it would require a two?thirds majority in the lower chamber, which the Arizona coalition does not command. As a result, the outcome of this reform remains uncertain.

For now, the government retains a relatively comfortable position and continues to hold a majority in most polls. However, the unpopularity of some proposed measures could become a source of political friction and pose challenges to cohesion over time. The next regular federal elections are scheduled for 2029.

Payment

Debt Collection

Amicable phase

There are no special provisions for out-of-court debt recoveries between businesses. Creditors should attempt to gain payment from debtors by sending written reminders. Before beginning legal action against a debtor company, it is often worthwhile asking a lawyer to check the database of seizures.

Legal proceedings

Judgments are normally delivered within 30 days after closure of the hearings. A judgment is rendered by default in cases where debtors are neither present nor represented during the proceedings.

Fast track proceedings

This procedure is rarely used in business-to-business cases, and cannot be implemented when the debt is disputed. A 2016 law implemented a new set of procedural rules, creating an out-of-court administrative procedure for non-disputed debts. When an order of payment has been issued, the debtor has a month to pay the amount. If the debtor refuses, the creditor can request a bailiff to issue a writ of execution. Moreover, under the new rules, lodging an appeal against a judgment will no longer suspend the enforceability of this judgment. Consequently, even if the debtor starts appeal proceedings, the creditor will be able to pursue the recovery of the debt.

Retention of title clause

This is a contractual provision stipulating that the seller retains title of goods until receipt of full payment from the buyer. Unpaid creditors can make claims on goods in the debtor’s possession. It therefore follows that the retention of title clause is enforceable in all situations where creditors bear losses arising from insolvencies, whatever the nature of the underlying contract. When goods sold under retention of title are converted into a claim (after a sale), the seller-owner’s rights referring to this claim (the selling price) are known as real subrogation.

Ordinary proceedings before the commercial court

All disputes between companies can be tried by the Commercial Court in Belgium. In cases of cross-border claims using European legislation, a European execution for payment proceedings can be enabled. Claimants also have recourse to European small claims proceedings.

Summon on the merits

The bailiff assigns the debtor a court date for the introduction of the case. If discussions do not take place, judgement will follow within four to six weeks. If there are discussions pending, parties need to put their intentions in written conclusions. After judgement, there is a possibility to appeal – if no appeal is filed, the execution will follow through the bailiff.

Attachment procedure

This judicial proceeding is conducted for the benefit of only one party (ex parte). There are three essential conditions to proceed with an attachment:

urgency of the measure;

prior authorisation of the judge is required to lay a conservatory attachment;

the debt must be certain, collectable and liquid.

A debtor may request the cancellation of the attachment if it has been unjustly imposed. However, once an attachment has been imposed, it remains valid for a period of three years. Subsequently, a conservatory attachment may be transformed into an execution order.

Enforcement of a Legal Decision

A judgment becomes enforceable once all venues of have been exhausted. If the debtor refuses to execute payment, a bailiff can attach the debtor’s assets or obtain payment through a third party (Direct Action).

Foreign awards can be recognised and enforced in Belgium, provided that various criteria are met. The outcome will vary depending on whether the award is rendered in an EU country (in which case it will benefit from particularly advantageous enforcement conditions), or a non-EU country (for which normal exequatur procedures are applied).

Insolvency Proceedings

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BANKRUPTCY PROCEEDINGS

Debtors can file for bankruptcy when they have ceased making payments for some time, or when the creditor’s confidence has been lost. If bankruptcy is granted, creditors must register their claims within the time prescribed in the court’s insolvency declaration. Failure to do so on the part of a creditor will result in the cancellation of their priority rights. The court then appoints a trustee, or official receiver, to verify the claims. The retention of title clause can be cited by the creditor, in order to claim his property.

Since 2017, submissions of claims where bankruptcy procedures are involved must be made electronically, via the Central Solvency Register (www.regsol.be), which records all bankruptcies over the last 30 years

JUDICIAL RESTRUCTURING PROCESS

The judicial restructuring process (reorganisation judiciaire), designed to reorganise a company’s debts with its creditors, can be granted by the court upon request of any debtor facing financial difficulties that threaten its continued business in the short- or medium-term. The debtor makes a reasoned application to the Registry of the Commercial Court in order to be granted an extended period to pay the debt. This extended period is normally set at six months, during which the debtor must propose a reorganisation plan to all of its creditors.

Outstanding creditors (those whose claims arose before the commencement of the extended period) cannot begin any execution procedure for the sale of real or personal property of the debtor, but can request enforcement of their retention of title clause. Nevertheless, the extended period does not prevent the debtor from making voluntary payments to any the outstanding creditors. In addition, the extended period does not benefit co-debtors and guarantors, who are still required to meet their commitments.

Last updated: March 2025