Belgium’s economy is predicted to see an average annual growth rate of 1.3% in 2024, according to research from the University of Louvain’s Institute of Economic and Social Research (IRES) released on Thursday.
Despite the forecasted increase, these figures represent a slight growth slowdown from 2023, when the Belgian GDP climbed by 1.5%.
In 2024, household consumption is expected to remain the main pillar of the GDP, forecast to increase by 1.4%. However, this growth is set to be curbed by a decrease in business investment (-2.7%) and household investment (-5.7%).
The growth of foreign trade is also predicted to stay negative, both in terms of exports (-2.1%) and imports of goods and services (-1.8%).
Nearly 37,000 people are likely to be employed in 2024, compared to 29,200 in 2023. The unemployment rate is anticipated to rise from 5.5% in 2023 to 5.7% in 2024, due to increasing labour force participation.
IRES also foresees two new occurrences of the pivot index, in April and September 2024. However, IRES cautions that current geopolitical and financial contexts may influence these forecasts.
Conflicts in Ukraine and the Middle East may lead to "unexpected adverse consequences" on food and commodity prices, as well as on international trade.
Labour market tension in some economic sectors may also slow down inflation slowdown and in turn hamper the growth of purchasing power.
The financial situation of certain banking and financial institutions could be compromised if restrictive monetary conditions persist for longer than predicted.
On a more positive note, IRES indicates that the international trade recovery expected in the latter part of the year could be stronger than forecasted, given some recent improvements in global indicators.
