Belgium’s economy will grow by 3.6% in 2021 and 3.5% in 2022, according to the latest forecast by the Belfius Bank.
The new projections are gloomier than previous ones issued by the bank’s research organ, which insists, however, on the great uncertainty surrounding the evolution of the Coronavirus pandemic, the end of support from the public authorities, and the behaviour of consumers and producers.
The new scenario is based on gradual relaxations starting in Summer and full reopening of the economy by October. Belfius also thinks the temporary employment system, which continues, provisionally, until the end of March, will be extended once again.
The bank expects “slightly negative growth in the first quarter of 2021 since consumer confidence has again dropped due to the new measures linked to the novel Coronavirus.”
It notes further: “The second quarter will be marked by very limited growth. It is only by the second semester that we shall witness a recovery, thanks to the relaxations and increased consumer confidence. We shall finally see accelerated growth in the fourth quarter.”
In 2021, recovery will be powered by increased household spending, while a real increase in business investment is only expected in 2022.
“The Belgian economy will only recover its pre-crisis level in mid-2022,” Belfius predicted in its report.