The earlier flash estimate of Q3 2025 GDP growth was confirmed at 0.3% qoq by the National Accounts Institute (NAI). Value added growth in industry came out slightly above the preliminary estimate reported earlier (i.e., 0.3% instead of 0.2%), while in the services sector and, especially, in construction it was below (i.e., 0.3% instead of 0.4% and 0.9% instead of 1.3%, respectively). Looking at the Q3 component data, a number of notable changes stand out (see figure BE1). Private consumption growth slowed markedly, attaining only 0.1%. Investment in housing continued its downward path, falling by 2.4%. Government consumption and investment increased by 0.7% and 0.6%, respectively. Business investment grew by a strong 2.8%. Exports and imports both fell by 0.7%, resulting in a slight positive growth contribution of net exports (+0.1 percentage points). Finally, growth in Q3 was held back by a large negative contribution from changes in inventories (-0.4 percentage points). 

Contradictory data

The slowdown in consumer spending in Q3 contradicts the strong revival in consumer confidence (see figure BE2). The remarkable improvement in the NBB survey observed since spring results from consumers’ more optimistic unemployment expectations, which in turn was driven by the imminent limitation of the duration of unemployment benefits. 

The survey question regarding unemployment expectations is not part of the EC confidence indicator which, as a result, has been less buoyant over the recent period. Also, the further correction in housing investment in Q3 is at odds with the gradual, albeit volatile, recovery of business confidence seen in the subsector of construction of residential buildings (see figure BE3). The surge in business investment in Q3 surprises as well, given that most companies interviewed for the recent NBB’s Business Echo reported to have moderated their investment spending. In fact, the surprisingly strong Q3 investment figure was distorted by a number of exceptionally large transactions. 

More generally, confidence of Belgian businesses rebounded in November, after the modest fall recorded in the previous month. As a result, the underlying trend of confidence continued to rise, despite persistent uncertainty on the international economic and geopolitical environment. A positive element is that, at least so far, the fall-out of US import tariffs on Belgian exports seems to have been contained. Although some impact from the trade disruption may still materialise, the further rebound in the assessments of export-order books gives hope that the ultimate effect of US tariffs on the Belgian economy will not be quite as strong as had been feared.

Labour market resilient

Together with GDP data, the NAI also reported on net job creation in Q3. Employment rose at a somewhat faster pace (+0.2% qoq) compared to previous quarters. More than 11,000 net jobs were added to the workforce, against less than 5,000 on average in the previous four quarters. The stronger growth was largely related to public-sector employment. In particular, nearly half the amount of net job creation in Q3 was in the subsector of human health and social work activities. Belgium’s harmonised unemployment rate rose to 6.4% in October, reaching the euro area rate for the first time since 2008. At first glance, the worsening seems to indicate that the labour market is deteriorating. However, the (limited) rise in the unemployment rate since autumn 2023 was fuelled by the participation rate (active population in % of people at working age) increasing somewhat more than the employment rate (people employed in % of people at working age).

We slightly upgraded estimated Q4 qoq GDP growth to 0.3%, driven by the continued positive trend in industrial confidence. Full year growth in 2025 is still seen at 1.0%. We kept quarterly growth dynamics in 2026 unchanged, resulting in full year growth of 1.1% in 2026. Belgian inflation based on the HICP came in at 2.6% in November, slightly up from 2.5% in October. Core inflation (excluding energy and food) rose more strongly, from 2.5% to 2.8%, and now is 0.7 percentage points above its low of 2.1% reached in August. The rise was caused in particular by higher services inflation (see figure BE4). The risk of sustained higher services inflation in the coming months is compensated by lower expected energy inflation, due to futures contracts currently suggesting a lower path for oil and gas prices compared to a month ago. As a result, we kept our outlook for annual Belgian HICP inflation in 2026 at 1.6%, down from 3.0% in 2025. 

Budget deal

End-November, the Belgian federal government agreed on a budget package, setting a new multi-annual path to meet the EU expenditure rule by 2029. The deal involves a mix of spending cuts and new revenue streams, generating a budgetary effort totalling EUR 9.2 billion. Despite the political agreement, budget concerns are not yet off the table. Without additional action, we see Belgium's budget deficit still above 4% of GDP by the end of the legislative term in 2029. As a result, the deficit will then be above the 3% target put forward in the original multi-annual plan and needed to end Belgium’s excessive deficit procedure in 2029. Instead of stabilising in 2027-2028, as envisaged in the original multi-annual plan, Belgium’s public debt ratio will still be on an upward path, reaching an expected level well above 110% by 2029.