Belgian economy shrinks 3.9% after two weeks of corona measures

The Belgian economy shrank 3.9% during the first three months of the year in comparison with the last three months of 2019. The National Bank estimate envisages a less severe contraction than the 5% predicted by most high street banks, but a bigger one than the shrinking of the Belgian economy in the financial crisis of 2008-9.

Slight growth of 0.2% was forecast ahead of the corona crisis, but it was not to be.  The blow to the economy is even greater than during the financial crisis when a contraction of -2.2% was recorded during the worst quarter.

The -3.9% figure only includes two weeks of corona measures.  Bars and restaurants opened for a last time on Friday 13 March.  The impact of corona measures on the economy during the second quarter of 2020 will be much worse.

The building sector that was allowed to keep on working if social distancing was applied sustained a contraction of 6.6%, while industry in general (-3.5%) and services (-3.6%) suffered less.

Compare Belgium’s economic performance during the first 3 months of this year to the same period in 2019 and you see a 2.8% contraction.

Belgium’s national bank does warn that the figures are less cast in stone than usual because they are based on assumptions.

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