Belgian banks anticipating a recession for the end of 2022

Belgian banks anticipating a recession for the end of 2022
Credit: Belga / Virginie Lefour

All four of Belgium’s four major banks are predicting a recession for the end of the year, but they disagree on whether it will continue into 2023.

On Saturday, L'Echo and De Tijd published the results of their study, in which they surveyed ING, Belfius, BNP Paribas Fortis, and KBC on their economic expectations for the fourth quarter of 2022. All four banks predicted that Belgian GDP would decline by 0.4% in the fourth quarter.

As the previous quarter saw the economy decline by 0.1%, Belgium would finish 2022 in recession, which economists define as the contraction of the economy for two quarters in a succession. This would represent a relatively uncommon situation, having only occurred twice in the last 20 years.

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In terms of next year, ING and Belfius believe the recession will last through the first quarter of 2023, with the former forecasting a very minor drop in activity for the entire year.

BNP Paribas Fortis and KBC, on the other hand, believe that the economy will undergo no further decline at the start of next year. Both banks however, along with Belfius, are only predicting a very minor increase in activity for 2023.

Banks cite the 11.5% wage indexation that about one million employees will receive in January, as well as general rising costs and interest rates, as causes for the decreased economic activity.

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