Belgium is bracing for higher inflation than previously expected, as new forecasts from the Federal Planning Bureau point to a notable upward revision for 2026. According to
figures released Tuesday, consumer prices are now projected to rise by an average of 3.2% this year, significantly above earlier estimates of 2.6% in March and 1.9% in February.
The adjustment reflects growing pressure on household costs, even though inflation remained relatively subdued in the early months of the year. In March, inflation stood at just 1.65%, but economists warn this calm period will be short-lived. Prices are expected to accelerate beyond 3% from April, climbing further to exceed 4% by October.
The outlook suggests inflation will remain elevated into 2027, with a peak forecast of 4.43% in January. It is not expected to fall below 4% again until March of that year. Over the full year, inflation in 2027 is projected to average 2.9%, indicating a gradual easing but still above long-term norms.
Energy costs at the core
The sharp revision is largely driven by rising energy prices, linked to ongoing geopolitical tensions in the Middle East. Increased uncertainty has pushed up global oil and gas prices, feeding directly into Belgium’s cost of living.
For its projections, the Planning Bureau assumes:
- Oil prices averaging $90 per barrel
- Natural gas at €46 per MWh
- Electricity at €101 per MWh
These higher input costs are expected to ripple through the economy, affecting everything from transport to food prices.
Impact on wages and benefits
The revised inflation outlook also has consequences for Belgium’s wage indexation system. The so-called pivot index, which triggers automatic increases in public sector wages and social benefits, is now expected to be exceeded more frequently.
The Bureau forecasts the index will be crossed:
- Twice in 2026 (July and December)
- Once in 2027 (December)
Because adjustments typically follow three months later, this would lead to wage and benefit increases in October 2026 and March 2027. While this mechanism helps protect purchasing power, it can also reinforce inflationary pressures by increasing labor costs.
Broader context: inflation in Belgium
Belgium has long stood out in the eurozone for its automatic wage indexation system, which ties salaries and benefits to inflation. While this provides a buffer for households, it can also make inflation more persistent compared to neighboring countries.
In recent years, Belgian inflation has been heavily influenced by energy shocks, particularly during periods of geopolitical instability. The latest forecast underscores how vulnerable the country remains to global energy markets, with external factors continuing to shape domestic price trends.
As inflation picks up pace again in the coming months, policymakers and households alike will be watching closely to see whether the expected peak in early 2027 marks a turning point—or the start of a longer period of elevated costs. Photo by Lionel Allorge, Wikimedia commons.