UCL’s Institut for Economic and Social Research (known as “IRES”) indicates, “Significantly increasing at the beginning of the year, Belgian economic activity should continue to develop favourably during the remainder of the year.” The organisation is counting in its quarterly forecasting on the site for Economic Outlook, upon an average annual GDP growth of 1.7% this year and 1.8% in 2018. In 2016, growth remained limited to 1.2%.
IRES details that economic activity may well be supported by the employment market performing well, the high levels of business and consumer confidence, as well as by accelerated international trade exchanges.
The Institut says consumer confidence may be one of the main drivers for Belgian economic growth in 2017 and 2018. Despite further increased inflation (2.1% this year and 1.5% in 2018), household purchasing power increased by 1.5% this year, mainly supported by exceeding the threshold index which took place in May, and by positive developments in the employment market.
Employment may thus increase in net terms, by a little more than 100,000 people over the period 2017 to 2018 whilst during the same period, the number of jobseekers may reduce by around 35,500 people.
Simultaneously, the improvement of the international economic situation suggests more supported growth in Belgian goods and services export sector. Within these sectors, there is an average expected increase of 4.9% for the current year and next year.
Lastly, IRES concludes that the public sector budget deficit, which reached 2.6% of GDP in 2016, may reduce to 2% in 2017 and 1.8% in 2018. It does however stress that there is “significant uncertainty around these perspectives,” owing in particular to protectionist measures. These may be implemented in the US. A further related uncertainty factor is the consequences of Brexit.
The Brussels Times