Belgian economy grew 10.7% in summer, but last quarter looks dark

Belgian economy grew 10.7% in summer, but last quarter looks dark
Home renovations were one spur to economic growth. © Laura Shaw/Pixabay

The Belgian economy recovered in the third quarter of the year by an unprecedented 10.7% following the lockdown from March onwards, De Tijd reports based on its own analysis.

However, the outlook for the final quarter of the year is not sunny, as the country heads for a new lockdown, whether full or partial.

The third quarter growth may have been spectacular, but it came in the aftermath of a 3.4% shrinkage in the first quarter, followed by 11.8% negative growth in the second quarter, when restaurants, bars and all non-essential retail was closed by government order.

Once the country came out of lockdown, the banks were forecasting a recovery of 7.7% growth. The actual figures were better than that prediction.

The re-opening of the economy after the coronavirus shutdown was not the only boost to the economy. As a result of the situation in other countries, many more people spent their summer holidays either at home or at destinations in Belgium, providing a much-needed stimulus to the domestic economy.

In addition, many Belgians took the opportunity to carry out work on their homes: the construction industry saw an 18% spurt in growth, compared to 12% in industry in general, and 9.9% in the services sector.

The growth in Q3 is reckoned to be the strongest in recent decades, the newspaper concludes, making up just over 60% of the losses in the first half. The economy now sits at 5.7% down from where it was at the end of 2019, before the coronavirus pandemic hit.

But the year is not yet over. The hospitality sector is again closed. There is a curfew in place, and restrictions on retail. Sports, culture and entertainment are also in lockdown, and new restrictions are added from day to day.

The last quarter looks rather black in prospect, as a result. And the problems are unlikely to disappear with the New Year.

Alan Hope

The Brussels Times

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