Belgium cannot afford another long, drawn-out wait for a new government, the head of the country’s business association, FEB, warned on Tuesday as he presented its half-yearly analysis of the state of the economy.
Political immobilism, especially at the federal level, risks transforming the “careful stability” of businesses into a loss of confidence amid uncertainty about Belgium’s economic growth, said Pieter Timmermans, director of the Fédération des Entreprises de Belgique (FEB).
In its survey, conducted before the 26 May elections among its sector federations, the FEB noted that economic activity in Belgium was “fairly well maintained” in the past semester despite a complicated international context.
The economic dynamic has slowed down worldwide, mainly because of the trade war between the United States and China, the uncertainty fuelled by Brexit, and Italy’s budget situation.
However, the majority of Belgian sectors expect a “rather stable” economic dynamic while the investment climate is generally positive, according to the FEB’s data.
The proportion of sectors expecting the job dynamic to be maintained increased from 57% to 64%, mainly due to the delayed effects of competitivity measures.
FEB considers economic growth of 1% to 1.25% still possible this year “as long as the major international risks can be avoided”.
Amid these various sources of uncertainty, the difficulty in forming a federal government would only add to the fear of an economic slowdown. “One thing is certain,” Timmermans said, “541 days of forming the government will send the budget off track and delay the response to crucial challenges such as the National Energy Pact or the Mobility Plan.
“The bill for citizens and businesses will only increase, with many job losses.”
The Brussels Times