Belgium is grappling with rising inflation rates, as highlighted by the recent economic analysis from the National Bank of Belgium. The inflation rate climbed to 4.3% in 2024, compared to only 2.3% the previous year. Projections indicate this increase is largely due to the end of government support measures related to energy prices, which had effectively cushioned the effects of rising energy costs for much of 2023.
The shift from these support measures eliminates the temporary relief consumers felt last year. According to the year-end report from the Prices Observatory of the Federal Public Service Economy, the inflation rate for food, services, and non-energy industrial goods dipped but remained significantly elevated. For example, food inflation decreased from 12.7% to 5.0%, indicating some relief but still placing substantial pressure on household budgets.
Notably, energy inflation surged to 9.7%, driven primarily by the withdrawal of governmental energy support. The changes were not merely numerical but also psychological, as many consumers reported feeling overwhelmed by their operational costs, which reflected higher prices on everyday essentials. Pierre Wunsch, governor of the National Bank, emphasized, "Ik vrees dat 2024 in vergelijking met 2025 een walk in the park zal lijken," underscoring the challenging economic outlook as international dynamics shift. Indeed, other nations like Germany, France, and the Netherlands showed decreased inflation rates relative to Belgium, illustrating the unique challenges faced by the Belgian economy.
Another aspect of Belgium's economy showed slightly stagnant growth, with the GDP growing at just 1% compared to 1.3% the year before. Despite these difficulties, Wunsch noted unexpected economic resilience within some previously struggling nations such as Spain and Portugal, indicating potential shifts within Europe’s economic balance. "We see a rebalancing of competitiveness within Europe," Wunsch remarked, fostering cautious optimism.
Contrastingly, household consumption appears to have increased as families positioned themselves against inflation. Belgian families now reportedly have net assets of €2.863 trillion, averaging €567,000 per household. Despite this, 56% of their wealth is tied up in real estate, limiting liquidity and prompting more borrowing amid rising interest rates. The National Bank indicated consumers are spending more and saving less, reflecting skewed perceptions of inflation due to significant price surges, particularly for food. Consumers often feel the pinch more acutely compared to the headline inflation rate, which tends to underreport the immediate pressures of real-life shopping.
Wunsch cautions against complacency, as Belgium’s productivity growth has markedly lagged behind larger economies. Reforms are critically needed, he argues, pointing to labor market and tax adjustments as key areas for improvement. “Each rule seems meaningful on its own, but collectively they make day-to-day operations cumbersome and could lead to populist sentiments if budding entrepreneurs feel blocked,” he stated.
Turning to the retail sector, Coolblue, the electronics retail giant, has shown confidence in Belgium's market by planning new store openings. Arne Van Verdegem, manager of Coolblue Belgium, stated, "Mensen willen zien hoe breed die televisie precies is," referring to consumer demand for physical shopping experiences, particularly for electronics where tactile engagement plays a significant role.
Currently with ten locations, the firm is set to expand, capitalizing on apparent growth demand from Belgian consumers. Despite challenges, such as their recent logistic partner disruption, Coolblue reported record revenue figures of €2.46 billion, up 2.1% from the previous year, primarily driven from their strong performance across borders.
The rapidly growing shared mobility sector also reflects changes within the consumption patterns of Belgians, as revealed by the Way To Go report detailing vehicle-sharing trends. With nearly 50,000 shared vehicles and bikes recognized within Belgian cities, this trend signifies changing attitudes toward ownership versus shared experiences. Jeffrey Matthijs, director of Way To Go, noted, "We wanted to measure the growth of shared mobility to understand its implications for future policies and market developments," indicating how infrastructure decisions might evolve alongside consumer preferences.
Despite the comprehensive insights provided, more empirical data is needed before definitive conclusions can be drawn about the actual impact of shared mobility on transportation behaviours. Yet, the overall sentiment holds firm; as cities innovate and evolve, their populations adapt, seeking cost-effective and convenient means of travel.
Looking forward, the combination of high inflation, shifting economic landscapes, and the rise of new consumer behaviour through innovative products and services indicate significant transformation within the Belgian economy. Concerns about potential future inflation maintaining its grip on household spending raise questions about sustainability and growth prospects. Only time will reveal whether these trends will reverse or if inflation becomes the new norm.