Belgium's economy in a nutshell - Economic outlook of April 2020
Table of Contents
Recent cyclical developments indicate that GDP growth was relatively good in 2019 (+1.4 % year-on-year, compared to +1.5 % in 2018), thanks to a strong domestic demand (excluding inventories changes). Although GDP growth is less vigorous in Belgium than in the European Union (+1.5 %), it is getting closer and closer to it. Moreover, GDP growth in Belgium was even more dynamic than in the euro zone (+1.2 %). GDP growth amounted to 1.2 % in the fourth quarter of 2019 y-o-y, at a slower pace than the one observed during the previous quarter (1.6 %) mainly due to a lower contribution of investments to GDP growth.
Services are the main driver of economic growth since 2014.
The production index in the manufacturing industry (construction excluded) increased in 2019 for the fourth time in a row while the production index in the construction sector has stabilized.
Business demographics continued to be strong in 2019, with more business start-ups than closedowns.
The employment rate increased in 2019 compared to 2018, while the total unemployment rate decreased.
After a slowdown in consumer prices in 2019, prices started to rise again in the first quarter of 2020, particularly for services and processed food.
As regards the near-term growth prospects for Belgium, the NBB and the FPB are predicting a major economic recession in 2020 as a result of the global coronavirus crisis. Consequently, GDP would fall by 8 % in 2020 after having grown by 1.4 % in 2019. Nevertheless, the recovery is already expected to take place in 2021 with an economic growth of 8.6 %.
In order to limit the spread of Covid-19 as much as possible and to protect the Belgian population, the government has taken a lot of support measures. While these will have an impact on the economic activity in Belgium, the data relating to the first quarter of 2020 were not yet available at the time of writing this analysis. It is therefore not yet possible to observe the economic impact of the coronavirus on the economic activity through the published figures.