Inflation and Purchasing Power for Belgian Investors

📅 Last updated: 8 May 2026
 ·  🏷 Topic: Inflation, purchasing power, savings, investment
 ·  🇧🇪 For: Belgian retail investors

Inflation is the silent money evaporator. Money sitting in a savings account at an interest rate below inflation shrinks in purchasing power every year — even though the nominal balance stays the same or grows. This is the strongest argument for long-term investing.

What exactly is inflation?

Inflation = the annual rise in the general price level. In the eurozone, the European Central Bank has a target of ~2% per year over the medium term (ECB mandate).

In Belgium specifically: indexed via the health index (consumer prices excluding alcohol, tobacco, and fuel). Important implication: in Belgium, wages, pensions, and social benefits are automatically indexed when the health index exceeds the “pivot index” (spilindex).

How inflation eats away at your savings

A simple example:

• You have €10,000 in a regulated savings account.
• Savings rate: 1.5% gross.
• Inflation: 2.5%.

After 30 years the nominal balance is €15,631 — but it can only buy €7,439 worth in today’s purchasing power. Almost 26% lost.

This is not theory — it is what has happened over the past 10 years for Belgian savers.

Where does inflation come from?

Three main causes:

1. Demand-pull inflation: too much money chasing too few goods. Central banks raise interest rates to cool this down.
2. Cost-push inflation: scarcity or more expensive raw materials (2022 energy crisis).
3. Wage-price spiral: wages rise, companies raise prices, wages rise further.

Belgian general CPI inflation peaked at roughly 12,3% in October 2022 on the back of the energy crisis (Statbel); the health index peaked somewhat lower but still well above the long-term 2% ECB target. Savers saw their real purchasing power decrease materially in 2022 while regulated savings rates stayed close to 1%.

What protects against inflation?

💡 Global equity ETFs are historically a reasonably good inflation hedge over the long term (10+ years). In the short term, the stock market moves on factors other than inflation.

Practical consequences for your finances

1. Emergency fund: accept the inflation erosion. An emergency fund of 3–6 months belongs in a liquid account, even though you lose real purchasing power there. Its function is liquidity, not yield. See Building an emergency fund.

2. Savings above 6 months should be put to work. For anyone leaving €50,000 in a savings account on top of the emergency fund: that money erodes structurally. It belongs in a diversified investment — equities, bonds, real estate, mix.

3. Pension planning requires nominal + real calculation. A pension capital of €500,000 built up over 30 years looks like a lot — in 2055 purchasing power (after 30 years of 2% inflation) that is ~€275,000 in today’s purchasing power. Plan with real returns, not nominal.

4. Wages are indexed, but not all income. Employees benefit from automatic indexation. Those living on a pension or investments do not — there, investment returns must at least match inflation.

Belgian context

Belgium is one of the few European countries with automatic wage indexation. This protects employees, but:

• It raises production costs for Belgian companies, which can weaken their competitive position.
• It keeps inflation itself high (wage costs → prices → wage costs).

For investors: the Belgian health index and inflation are not identical to eurozone inflation. Inflation differentials can affect your BEL 20 vs MSCI World return.

🔗 See Beleggingsfundamenten (NL) for the general relationship between inflation and investing.

Tax is levied on the nominal amount, not the real one

This is where inflation and taxation reinforce each other, and it is rarely made explicit. Belgian levies look at the nominal result:

• 30% withholding tax on a coupon or dividend, whether or not that amount genuinely increased your purchasing power.
• 10% capital-gains tax on the realised nominal gain above the annual €10,000 exemption — with no adjustment for inflation since purchase.

The consequence: an investment that exactly keeps pace with inflation delivers nothing in real terms but is still treated as a gain for tax. You pay tax on a nominal increase that did not raise your purchasing power.

That makes low-nominal-yield savings products doubly vulnerable in an inflationary period: inflation erodes the real value first, then tax takes a share of the nominal return.

What actually helps

• Use the exempt first tranche on a regulated savings account before looking at taxed alternatives.
• Spread the annual €10,000 exemption across calendar years when realising gains — it is per person, per year, and lapses unused.
• Accumulating funds defer the charge until sale, so nominal growth compounds untaxed for longer. Deferral is not avoidance, but it compounds.
• Above all, a horizon long enough to achieve a real positive return. No tax measure compensates for an investment that structurally fails to keep up with inflation.

Sources

1. ECB — Inflation target 2%
2. Statbel — Belgian consumer price index
3. NBB — Macroeconomic data Belgium

Continue reading

investnow.be › Belastingen

Belgian Investment Taxation: TOB, CGT, Reynders [2026]

Belgian investment taxation: 0,12-1,32% TOB, 30% dividend withholding, 2026 capital gains tax (10% above €10.000) and the Reynders tax explained.

investnow.be › België

Saxo Bank Belgium (Review): Ex-BinckBank Guide

Saxo Bank Belgium review: platform, instrument range, costs, and how it compares to Bolero, DEGIRO and Keytrade for active investors.

investnow.be › Belastingen

Non-Resident Tax Treatment in Belgium

How non-residents are taxed on Belgian-source income: rental property, dividends, pensions and capital gains. 2026 rates and treaty exemptions explained.