Belgian economy recovering better than expected

By the end of this year the Belgian economy will have recovered sufficiently to have returned to the level that it was at just prior to the onset of the coronavirus pandemic earlier last year. The latest projections from the National Bank of Belgium shows that our country’s economy will have returned to pre-pandemic levels 6 months earlier than previous projections had predicted. 

The National Bank of Belgium (NBB) now predicts 5.5% economic growth for this year. This is 2% higher than the growth predictions made by the bank at the start of the year. NBB predicts 3.3% growth during 2022.

Last year the coronavirus crisis saw the Belgian economy contract by 6.2%. The Governor of the National Bank of Belgium Pierre Wunsch (photo above) told a press conference on Monday morning that “The structural damage caused by the pandemic could remain relatively limited”. Nevertheless, Mr Wunsch did concede that there is still some uncertainty with regard to the public health situation.

During the past few quarters, the Belgian economy has shown greater resilience than economies elsewhere in the Eurozone. One of the reasons for this is that the restrictions that were in force here to curb the spread of coronavirus were less severe that in many other Eurozone countries.

The recent reopening of the hospitality industry will serve to further fuel economic growth. The National Bank of Belgium has also noted a recovery in business and consumer confidence. Commercial investment is now back at the level it was prior to the public health crisis. Consumer spending could provide the motor to fuel further growth the next few quarters. 

Employment prospects looking good

The positive growth projections are good news for the labour market. Last year the National Bank of Belgium predicted that the coronavirus crisis would cost 100,000 jobs. However, the bank’s economist Geert Langenus now says that this could be very much less.  

"The protection measures have been extended. In sectors that have been very badly hit, some people have found other jobs”. 

Last year the net total of jobs lost was just 800. This year it is expected that 31,600 new jobs will be created. However, we need to remember that in April 460,000 people were still laid off and on temporary unemployment, but at the same time some sectors are suffering from shortages of suitable labour. 

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