Price explosion Costs of companies Wage indexations Competitiveness Impossible dilemma

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.


Christophe Ernaelsteen

Edward Roosens

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