The National Bank of Belgium does not foresee wage increases beyond wage indexing over the next three years, according to its semi-annual economic projections.
However, a comparison with Germany, the Netherlands, and France shows that wages in Belgium continue to rise faster than in neighbouring countries. This rise is even 1% higher than previous projections by the National Bank. The larger wage gap is primarily due to Belgium’s automatic indexing system.
This indexing is partly attributed to rising inflation, which reached 4.3% in 2024, mainly because of higher food inflation and increased energy prices. The National Bank also points to the higher cost of service vouchers, especially in Flanders.
"One fifth of the higher-than-expected wage cost is due to these more expensive service vouchers. Even if they only cost one euro more each, this represents an increase of over 10%," explained Geert Langenus, chief economist at the National Bank.
As a result, with indexing and rising wage costs, the wage gap with neighbouring countries widens and will take longer to close. The National Bank estimates the gap will not be closed by 2027.
Belgian law requires this wage gap to be eliminated. "This means there should be no room for conventional wage increases beyond indexing over the next three years," said National Bank Governor Pierre Wunsch.
He added that the National Bank does not determine future wages, which are negotiated between unions and employers based on figures from the Central Council of the Economy.
