Figures from the National Bank, Belgium’s central bank, show that Belgian people will be saving an extra 5 billion euros this year. During the first half of the year the share of Belgians’ income they could save rose to 14%.
Belgians are enthusiastic savers. This was once again clear earlier this month when a new Belgian state bond raised 22 billion. Belgians also have a further 300 billion deposited on savings accounts.
The surge in savings to 14% of disposable income reverses the trend of recent years. The share of their income Belgians decided to save has been falling for years: from 18% around the turn of the century to a low of 12% in 2016. The pandemic boosted savings as households struggled to spend their cash. In 2020 and 2021 20% and 17% of Belgians’ income was set aside as savings. Due to lockdowns and various corona measures Belgians saved more, even though incomes remained stable as a result of pandemic support measures. By last year the pandemic was well and truly behind us and the share of income that ended up in savings fell again, to 12%.
This year the share of income that was saved rose to 14%. This rise is being linked to Belgium’s unique system of automatic linkage of wages and benefits to prices. The index link meant over a million workers enjoyed a 10% hike in their wages at the beginning of the year. Salaries rose, but in recent months there was less pressure on disposable income. Belgians saved 75 euros of every extra 100 euros they received. Higher savings rates and the fear of increased taxes encouraged Belgians to save more.
The National Bank expects Belgians to save 13.5% of their income in 2023. For 2024 and 2025 a rate of savings of 13% of disposable income is anticipated.