Economy and finance

The impacts of climate change are likely to affect the Belgian economy in the long term, with a weakened insurance system, public finances under pressure, vulnerable supply chains and industrial sectors threatened by water stress. Warning signs are multiplying.

The floods in the Vesdre Valley in 2021 cost an estimated €5.2 billion and displaced thousands. To deal with similar extreme events, there have been plans since 2016 to create regional solidarity funds. However, these funds have not been financed in either Wallonia or Brussels. That is still the case in 2025.

Grégory Truong, economics expert at Cerac, explains: "This situation has forced insurers to double their contributions in relation to their legal obligations, thereby creating considerable legal uncertainty for the sector. Faced with a rise in climate-related disasters, reinsurers could leave the Belgian market, leaving some citizens and companies without the possibility of taking out insurance, or at higher prices". Such difficulties in accessing insurance are already a reality in neighbouring countries such as France.

Public finance: a balanced budget under pressure

The entire Belgian economy and public finances will be impacted by climate change. Lower productivity, negative impact on tax revenues, increased public spending and climate inflation could lead to a substantial increase in public debt by the middle of century, requiring budgetary and fiscal adjustment.

Dependence on imports: Belgium's vulnerability exacerbated

Climate crises, aggravated by speculation, affect the prices and availability of agricultural products on international markets. As a small, open economy, Belgium is particularly vulnerable to shocks that disrupt supply chains. Our companies depend on foreign imports for various raw materials and intermediate products, such as pharmaceutical and chemical compounds, as well as electronic components. These products are often imported from regions where climate change is having a serious impact, including on production. This drives prices up and threatens the continuity of supply in Belgium. In addition, on the national scale, water stress threatens key sectors such as chemicals, pharmaceuticals, agri-food and tourism.

Recommendations to strengthen the country's resilience

To address these risks, Cerac recommends urgently strengthening the legal framework for insuring natural disasters, improving financing for solidarity mechanisms, and ramping up investment in climate change adaptation.

For further information, please refer to chapter 3.5 of the report. You will find an overview of the risks for the economy and finance. In chapter 7, you will find, among other things, an overview of our recommendations for the economy.

Also read the technical papers and summary sheets that discuss these risks (download below).