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The default risk of Belgium government on its debt is currently low but concerns arise as Fitch downgrades Belgium’s credit rating from stable to negative.
The concept of linking debt payments to changes in GDP became popular again during the debt crisis of the 1980s and gained even more attention during the COVID-19 pandemic. The utilized research suggests that the benefits of this idea depend on how it is implemented and are greatest when payments are directly linked to changes in GDP.
Past experience with GDP-linked bonds, particularly the failure of Argentina's experiment and the success of Portugal's engineering with these financial assets, suggests that the design of the contract is key.
By using an optimized indexed debt approach, default risk can be eliminated, consumption volatility might be halved, and asset prices can rise although government debt balances increase. These changes occur because a carefully chosen indexation method can improve market completion.

This article summarises the main findings of the most recent joint update report on asset management and non-bank financial intermediation (NBFI) by the Financial Services and Markets Authority (FSMA) and National Bank of Belgium (NBB), published on 21 December 2022. It is the fourth update of the joint NBB-FSMA report on Asset management and NBFI, formerly referred to as shadow banking, which was submitted to the Minister of Finance and the High-Level Expert Group (HLEG), and subsequently published, in September 2017.

This is the speech given by  vice-prime minister and minister of Finance,  Vincent Van Peteghem, at this year’s Febelfin Connect event “The Financial sector, a partner for the future” in Brussels on March 29, 2023.

The explosion of prices since the COVID-19 health crisis has significant impacts all around the world. In this contribution, we examine the consequences of the price explosion on the costs of Belgian companies. Four categories of costs are reviewed: the energy costs, the costs of raw materials and industrial inputs, the wage costs and the transport costs. For most of these costs, the increases are higher in Belgium than in the neighbouring countries. We then analyse and estimate the impact of the cost increases on the competitiveness of Belgian companies. According to our estimates, the loss of competitiveness of Belgian companies will be between 3 and 10%. To solve this situation, companies face what we have called an impossible dilemma: increase their selling price or reduce their profitability. However, both solutions will have negative effects on economic growth and employment in Belgium.