OECD: A second wave of Covid-19 would cost Belgium €35 billion
Share article:
Share article:

OECD: A second wave of Covid-19 would cost Belgium €35 billion

© Belga

A second wave of the Covid-19 epidemic in Belgium would cost the economy an estimated €35 billion, according to the Organisation for Economic Cooperation and Development (OECD).

The organisation estimates the chance of a second, smaller outbreak of the disease at 50%, and in its half-yearly projections has imagined two scenarios: one with a second wave in October or November, and one without.

In the first scenario, the third quarter (July-September) would see a revival of the economy in the organisation’s member states, which include Belgium. However that would then be followed by a return of the virus and at least some of the lockdown measures seen in the last three months, with substantial economic damage as a result.

For Belgium, the two scenarios would mean economic activity for the year as a whole would close down 2% in the best of cases, and more than 5% in the worst case. In money terms, that would mean the loss of €11 billion in economic value for 2010, and €25 billion in 2021.

The effects would also be felt in the jobs figures, as companies turned to redundancies rather than temporary unemployment, their reserves having been eaten away by the first wave and its lockdown.

The OECD forecasts unemployment would rise to 9.3% in 2021, instead of the 6.5% expected in the best-case scenario – an increase of 150,000 unemployed people.

As far as government finances are concerned, a second wave of infection would increase the budget deficit by €9 billion this year and €19 billion in 2021. Add to that an 8% deficit in GDP, and government indebtedness would rise to 125% of GDP.

The government does not get off lightly.

The government should avoid tax measures such as a VAT reduction for restaurants and hotels,” the report advises. Just too late, because that measure has already been announced for bars and restaurants.

If the hospitality industry needs additional support, the OECD says, regional governments should increase cash compensation.

The organisation also calls on the government to channel the enormous increase in family savings into companies in order to prevent massive bankruptcies. This can be done by granting a tax advantage for investment in small and medium-sized companies, an idea that is already being discussed in Belgium.

Alan Hope
The Brussels Times

Latest news

Several rush hour train services to be scrapped from Monday
Up to ten peak time trains to and from Brussels will be temporarily cancelled starting from Monday, Belgian railway company SNCB announced this ...
Europe’s largest vintage clothes store is in Ghent this weekend
Europe's largest pop-up store for second-hand clothes is once again setting up shop in Ghent on Sunday, offering more than five tonnes of vintage ...
Animal welfare in EU’s pig meat sector: What’s wrong?
EU has put into place legislation to ensure that animal welfare conditions are respected in its agricultural policy but the breaches of its ...
‘Not feasible’: Doctors refuse to follow new testing strategy
Doctors have warned they will not follow the government's adapted testing strategy which would see vaccinated people who were in close contact with a ...
Flanders introduces ‘invisible’ speed cameras
New digital speed cameras that are essentially invisible to the road user are being introduced on various roads and motorways in Flanders, Flemish ...
Warnings issued for slippery roads across Belgium
Drivers have been asked to watch out for slippery roads from Saturday afternoon until Sunday evening, as snow and cold temperatures are expected ...
Testing rules following high-risk contact eased for vaccinated people
The coronavirus testing policy following a high-risk contact has been eased, meaning a vaccinated person who was in contact with an infected person ...
New measures announced for Belgian schools
Stricter rules are being implemented across a variety of sectors in Belgium to curb the rising number of infections and limit the damage as a result ...
Majority of booster doses should be administered by March 2022
Invitations will be sent out in the following days for the general population in Belgium to receive a coronavirus booster vaccine, and most adults ...
Belgium adopts national plan to combat gender-based violence
Belgium has adopted a National Action plan for the Fight against Gender-Based Violence, which includes more than 200 measures and unites all levels ...
Antwerp cancels Christmas market and New Year’s Eve fireworks
The city of Antwerp has joined other cities including Leuven and Ghent by announcing it is cancelling this year's Christmas market, the end-of-year ...
Pharmaceutical companies looking into vaccines against new variant
Pharmaceutical companies have sprung into action to look into vaccine protection against the new coronavirus variant first detected in South Africa, ...