Belgium Economic Forecast

Belgium Economic Outlook

September 29, 2020

A second estimate revealed the economy entered recession in Q2 as the pandemic took its toll on domestic demand, weighing on private consumption and investment. Turning to Q3, the signs of a recovery appear muted. The unemployment rate rose in July, signaling a deteriorating labor market, while retail sales showed anemic growth in the same month. More positively, however, the decline in industrial production eased in July on smaller contractions in the manufacturing and energy sectors, and stronger mining and quarrying output. What’s more, despite souring in July–August, consumer confidence bounced back in September, showing signs of improving sentiment. On that note, business confidence also firmed somewhat in July–August. Meanwhile, in politics, the seven party leaders trying to form a coalition announced on 11 September that they are committed to forming a new federal government by 1 October.

Belgium Economic Growth

GDP is seen falling at the sharpest rate in decades this year as the pandemic and containment measures pummel household spending, fixed investment and exports. In 2021, renewed domestic and foreign demand should support a recovery. Risks to the outlook stem from further flare-ups of the virus, which could trigger new restrictions in Belgium or its key trading partners. FocusEconomics analysts see the economy contracting 8.1% in 2020. In 2021, they see it expanding 5.5%, which is unchanged from last month’s forecast.

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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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