Belgium Economic Forecast

Belgium Economic Outlook

February 4, 2020

A preliminary estimate revealed that economic growth was stable in the fourth quarter of last year. While a comprehensive release is not yet available, private consumption likely fueled growth thanks to a tightening labor market and improving consumer sentiment in Q4. On the other hand, fixed investment was seemingly held back by lackluster sentiment in the construction and manufacturing sectors, and Brexit-linked uncertainties. Turning to the first quarter of this year, improved consumer and business sentiment in January suggest that the economy began the year on a positive note. In politics, negotiations to form a federal government dragged on in January, as the New Flemish Alliance (N-VA) and the Walloon Socialist Party remain at odds on key policy issues. Regardless, the next administration will be tasked with reducing the structural deficit by 0.6 percentage points of GDP in 2020, as requested by the European Commission.

Belgium Economic Growth

Growth is expected to ease this year as looming uncertainties weigh on sentiment. Fixed investment growth should slow amid Brexit-linked apprehension and a sluggish Eurozone backdrop, while government consumption is likely to moderate if a federal government is formed. On the upside, rising wages and contained inflation will likely boost private consumption. FocusEconomics analysts see growth at 1.1% in 2020, which is unchanged from last month’s forecast, and at 1.2% in 2021.

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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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