Belgium’s unemployment rate rose to 6.5 per cent in June 2025, up from 5.5 per cent the year before.
The increase contrasted with a slight decline in the European Union average, which fell from 6.0 to 5.9 per cent over the same period.
It was the first time in several years that Belgium’s unemployment rate exceeded the EU average.
Most neighbouring countries saw either stable or improving labour market conditions, according to the July 31 labour market report from Eurostat, the statistical office of the EU.
Peter Maes, senior economist at ING Belgium, told Brussels Signal on August 4 that the difference may seem modest but is meaningful in labour market terms.
“Job creation is slowing down. This is partly explained by lower economic growth,” he said.
Most neighbouring countries experienced different trends. France’s unemployment rate declined from 7.5 to 7.0 per cent. Luxembourg’s rate increased slightly from 6.3 to 6.6 per cent, while Germany and the Netherlands maintained low and relatively stable unemployment, rising slightly from 3.4 to 3.7 per cent and 3.6 to 3.8 per cent, respectively, according to Eurostat.
Maes said the EU average tended to change gradually but Belgium was already showing signs of a slowdown in job creation compared to previous quarters.
This aligned with trends highlighted by the European Commission’s review from April 2025, which noted employer hiring expectations began to slide in late 2024 and continued through early 2025.
The Employment Expectations Indicator fell from 100.1 in October 2024 to 97.7 in March 2025, signalling reduced hiring momentum.
Meanwhile, firms’ labour hoarding behaviour, where companies keep workers despite weakening demand, stabilised after a steady increase throughout 2024.
The EC report also observed that “labour shortages eased, but not due to higher unemployment — rather due to softening demand and a slowdown in hiring plans.”
This suggested employers were becoming more cautious amid uncertain economic conditions rather than responding solely to a rise in unemployment, it added.
These trends emerged as businesses adjusted to external trade risks. Following US President Donald Trump’s return to the White House in January, European exporters prepared for renewed US tariffs, effective from April 2025. Many firms started adapting labour plans in March.
Belgium’s small, open economy, highly exposed to trade and investment shifts, combined with a comparatively rigid labour market, may explain why these changes appeared earlier than in some other member states.
It also suggested a dual-speed labour market response: Fast economic reaction to external shocks but slower employment adjustment.
Stijn Baert, Professor of Labour Economics at Ghent University, told Brussels Signal that the developments reflected structural features more than recent policy. He noted that Belgium’s labour market did not react quickly to economic cycles.
“During the Covid-19 pandemic, the labour market remained unusually stable, showing less increase in unemployment than many other European countries,” Baert said. “This is partly due to strong economic stabilisers like temporary unemployment benefits and social security.”
He added, though, that Belgium tended to lag behind other countries during periods of economic recovery. The labour market was relatively rigid, with high taxes financing these stabilisers and less tradition of activating unemployed workers towards job vacancies, he said.
Baert also pointed out that the current rise in unemployment was not due to recent reforms, as the relevant policies were only approved recently and had yet to take effect. For example, the planned limitation on the duration of unemployment benefits was scheduled for 2026.
He said that the Belgian labour market had fewer short-term unemployed, who typically fluctuated with economic cycles, but a higher proportion of long-term unemployed who remained so even in better times.
This partly explained why unemployment is rising now despite the broader European context, he added.
Christofer Govaerts, chief strategist at Belgian bank Nagelmackers, highlighted Belgium’s historically insulated labour market. “Belgium has behaved for a long time as if it were an island … Social benefits are relatively generous and unlimited over time, and the pension system, despite reforms, remains costly and unsustainable in the long term,” he said.
“Public debt is over 110 per cent, compared to 40 per cent in Sweden for instance, making structural reforms essential but slow to show impact.”
Out of work young people remained a particular concern. According to EU Social data from May 2025, Belgium’s youth unemployment rate stood at 17.4 per cent — more than 2.5 times the overall national rate.
The EU average was 14.7 per cent. Germany and the Netherlands reported lower youth unemployment rates at 6.6 per cent and 8.8 per cent, respectively, while France and Luxembourg stood at 18 per cent and 21.9 per cent.
An European Commission spokesperson told Brussels Signal: “Although youth unemployment is decreasing, it remains more than twice as high as general unemployment. Particular focus needs to be put on young people who are not in employment, education, or training.”
In a July 28, 2025 press release, the European Trade Union Confederation (ETUC) warned that jobs were already being lost in key industrial sectors.
“The EU urgently needs a coordinated employment response to protect manufacturing and services,” it said.
Its secretary general Esther Lynch stated: “The EU cannot afford to lose more jobs in the industrial heartlands. We need swift, coordinated action at the European level to support workers and companies facing the fallout from global trade tensions and economic uncertainty.”
Belgium has started already to implement reforms aimed at increasing labour market flexibility and reducing unemployment benefit duration. These measures were expected to take effect from 2026.
Maes said other recent reforms were not yet visible in the data: “This does not yet reflect the policies of the new federal or regional governments, which only recently approved changes.
“For example, the limitation of unemployment duration is planned for 2026.”
