Belgium Economic Forecast

Belgium Economic Outlook

October 27, 2020

The economy should have recovered somewhat in Q3 after entering recession in Q2, although the pandemic continued to weigh on activity somewhat. Data for Q3 shows that industrial production deteriorated at a reduced rate in July–August relative to Q2. Moreover, retail sales regained strength in July–August, surging in August at a pace not seen since September 2008. In other news, a new coalition government was sworn in on 1 October, breaking 16 months of political deadlock. The new government’s program promises extra spending, which should support the recovery ahead. However, the challenging fiscal situation could limit room for maneuver, while the divergence of parties makes the coalition fragile. Meanwhile, surging Covid-19 cases led to the imposition of new restrictions on 19 October, including the closure of bars and restaurants, which is likely to hamper the recovery in Q4.

Belgium Economic Growth

GDP is seen recovering next year as decreasing uncertainty stemming from the formation of a new government, and the lessening impact of the pandemic, should lead to a recovery in investment and private consumption. However, the recent surge in virus cases, which could prolong the health crisis into next year, is a threat to the outlook. FocusEconomics analysts see the economy expanding 5.0% in 2021, which is down 0.5 percentage points from last month’s forecast. In 2022, they see it expanding 3.2%.

Belgium Economy Data

2015 2016 2017 2018 2019
Population (million)11.211.311.411.411.5
GDP per capita (EUR)37,08338,04939,32140,31341,289
GDP (EUR bn)417430446460473
Economic Growth (GDP, annual variation in %)2.01.52.01.41.4
Domestic Demand (annual variation in %)2.22.21.22.11.4
Consumption (annual variation in %)1.61.91.81.51.1
Investment (annual variation in %)3.73.81.34.03.2
Exports (G&S, annual variation in %)3.76.55.31.21.1
Imports (G&S, annual variation in %)3.97.54.42.11.0
Industrial Production (annual variation in %)-1.24.62.91.74.8
Retail Sales (annual variation in %)2.3-0.1-0.5-0.60.6
Unemployment Rate8.57.97.16.05.4
Fiscal Balance (% of GDP)-2.4-2.4-0.7-0.8-1.9
Public Debt (% of GDP)10510510299.898.6
Inflation Rate (HICP, annual variation in %, eop)1.52.22.12.20.9
Inflation Rate (HICP, annual variation in %)0.61.82.22.31.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)0.050.00.00.00.0
Stock Market (annual variation in %)12.6-2.510.3-18.522.0
Exchange Rate (vs USD)1.091.051.201.141.12
Exchange Rate (vs USD, aop)1.111.111.131.181.12
Current Account (% of GDP)1.30.61.2-1.3-1.3
Current Account Balance (EUR bn)5.82.45.5-6.4-5.8
Trade Balance (EUR billion)19.217.218.511.616.7
External Debt (% of GDP)256277256242248

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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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