OECD Economic Surveys: Belgium 2022
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
Also available in: French
Improving economic opportunities for all
Income inequality is low in Belgium, and intergenerational income mobility is on par with the average OECD economy. However, as in other OECD countries, there is scope to improve equal access to opportunities across the population. Poverty risks are high for the unemployed and the low-skilled. Vulnerable socio-demographics, in particular the low educated, single mothers and people with a migrant background and with disabilities have persistently low incomes. Moreover, low-income households are overburdened by housing costs. To foster upward income mobility, employment should be increased among vulnerable groups by enhancing skills through life-long learning, effective career guidance and continuing to strengthen work incentives. To prevent the transmission of disadvantages across generations, social segregation in compulsory education should be addressed, in particular through better-designed school choice policies, higher mobility between general and vocational tracks, and stronger incentives and training for teachers. Promoting quality and affordable housing is also necessary to reduce spatial segregation and mitigate barriers to opportunity.
Also available in: French
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