Belgium’s recovery from the COVID-19 pandemic has been robust thanks to extensive policy support. However, the new shock from the war in Ukraine is exacerbating inflation, and supply and labour market shortages, highlighting the importance of boosting the resilience of the Belgian economy. Medium-term fiscal sustainability challenges should be addressed by limiting early exit possibilities from the labour market, improving the efficiency of public spending, in particular through spending reviews, and boosting the coordination of fiscal policies by all levels of government to create room for public investment. Removing disincentives to work and strengthening the effectiveness of active labour market policies, in particular for disadvantaged groups, raising digital skills and reducing disparities in education outcomes would boost employment, lower skill mismatches and improve equal access to opportunities. Well-targeted investments in green and digital infrastructure by addressing bottlenecks and providing the right price signals are needed to raise productivity growth and contribute to more sustainable growth.

SPECIAL FEATURE: IMPROVING ECONOMIC OPPORTUNITIES FOR ALL