Belgian economy could grow by almost 5% in 2021 ‘if coronavirus measures are temporary’

Belgian economy could grow by almost 5% in 2021 ‘if coronavirus measures are temporary’
Credit: Belga

The Belgian economy is predicted to grow by 4.9% in 2021 if the recently imposed coronavirus fighting measures remain temporary, according to forecasts by the Institute for Economic and Social Research (Ires, UCLouvain) published on Thursday.

Despite economic activity still largely being interrupted due to the coronavirus health crisis, the start of the vaccination campaign in the country, and the signs of improvement in the international economy have had a positive impact on the economy, the research found.

According to the institute's forecasts, the Belgian economy grew at a rate of around 1% in the first quarter of this year, but it is expected to slow down significantly in the second quarter, as stricter measures were imposed around the start of this quarter.

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However, the research found that, if these measures remain temporary and if the vaccination rollout accelerates in the coming months, a more sustained recovery can be expected in the second half of the year, and Belgium could reach a growth rate of 4.9% over the whole of 2021.

Ires stated that in this scenario, economic recovery could lead to employment being increased by around 33,000 units in 2021, while the number of job seekers would rise by 7,300 units.

Last year, the recovery of the Belgian economy was sustained in the third quarter, but it came to a halt during the last months of 2020, again following the impact of the coronavirus fighting measures introduced because of the resurgence of the pandemic.

To gather these figures, the institute extracted relevant information from data that was available at a higher frequency (usually monthly) than the quarterly GDP growth figures, which “are available only with a slight delay.”

“These real-time predictions are particularly useful in the event of sudden economic shocks (as is the case today with the coronavirus crisis), the impact of which on the global economic activity should be quickly assessed,” the institute stated in its forecast.

Lauren Walker

The Brussels Times

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