Belgium's Economic Growth Stagnates at 0% in Q2, Tightening Budget Pressures

Belgium's gross domestic product grew by only 0.2% in the first quarter and fell to 0% in the second quarter, leaving the federal budget under added strain. The shortfall translates into roughly €1.5 billion of extra savings needed to meet fiscal targets.

The euro‑area as a whole recorded 0.4% growth in the second quarter, while the European Union’s average growth last year was 1.2%, more than double Belgium’s 0.5% rate. Neighboring economies performed better: France grew 0.7%, Germany 0.9% and the Netherlands 1.3%.

Analysts cite Belgium’s automatic wage indexation, which initially boosted purchasing power during the inflation surge caused by the war in Ukraine, but now contributes to slower growth after the supportive measures have been withdrawn. Structural weaknesses are also highlighted, with the services sector showing modest gains while construction and industry have contracted.