Belgium Economic Forecast

Belgium Economic Outlook

May 5, 2020

A preliminary estimate revealed the economy contracted at the sharpest quarterly pace on record in Q1 as Covid-19 took its toll. The downturn was seemingly broad-based: Confinement measures likely dealt a blow to private consumption, while fixed investment is set to have fallen markedly amid heightened uncertainties. Moreover, the worst of the crisis is slated to hit in Q2, as hinted by over two-decade low consumer and business sentiment in April and prolonged social distancing. As a result of the deterioration of the public finances prompted by the crisis, on 3 April Fitch Ratings downgraded the outlook on the country’s credit AA- rating from stable to negative. Meanwhile, on 24 April the government unveiled its strategy to gradually lift the lockdown in May–June; however, the economy will likely operate well below full capacity for a longer period of time.

Belgium Economic Growth

The economy is set to contract this year as a result of the health crisis. Fixed investment is likely to fall on depressed sentiment and the uncertain length of the pandemic, while downbeat external demand and falling tourism should weigh on exports. Meanwhile, the fiscal deficit is set to jump this year, putting pressure on politicians to curtail spending ahead. FocusEconomics analysts see the economy contracting 6.5% in 2020, which is down 3.3 percentage points from last month’s forecast. In 2021, they see it expanding 5.4%.

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Belgium Facts

Value Change Date
Bond Yield0.100.15 %Dec 31
Exchange Rate1.120.65 %Dec 31

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