Economic projections for Belgium

The National Bank of Belgium publishes economic projections for Belgium twice a year. The main results are reproduced here. These projections are discussed in more detail in the December 2019 issue of the Economic Review.

The projections are produced as part of a joint Eurosystem exercise and are based on technical assumptions and international forecasts formulated jointly by the ECB and the euro area central banks. They only take account of measures that have been – or are very likely to be – formally approved and for which the implementing arrangements have been set out in sufficient detail at the cut-off date of the projections. The projection period runs to year t+3 (in this case up to 2022); the margin of error surrounding the projections is wider for the later years, partly owing to greater uncertainty about the assumptions, especially those concerning the international environment.

The latest projections for Belgium, published on 16 December 2019, were finalised on 27 November. The corresponding results for the euro area are published on a dedicated webpage on the ECB’s website.

Up until now, growth of economic activity in Belgium has remained surprisingly robust in comparison with euro area growth, but should cool down little by little, under the influence of steadily moderating domestic demand, despite a gradual recovery in world trade from 2020 onwards. Growth in business investment in particular seems to be running out of steam, while the contribution to growth from net exports remains negative. In the first half of the projection period, rising purchasing power will fuel a faster increase in household consumption but this will probably cool off a bit once again towards the end of the period. Overall, year-on-year growth of economic activity should work out at 1.3 % in 2019 and then fall progressively to 1 % in 2022. Including the year 2019, over the projection period, around 170 000 extra jobs (in cumulative terms) are expected to be created. The unemployment rate is set to drop back to 5.4 % from 2020 and remain more or less stable after that. Inflation should reach 1.3 % in 2019, considerably lower than last year, mainly because of the fall in energy prices. It is projected to rise to 1.7 % by 2022. The public deficit is estimated at 1.6% of GDP for 2019, and is expected to rise to 2.8% of GDP by the end of the projection period.

 

Projections for Belgium: Overview of the main results

 

2018

2019e

2020e

2021e

2022e

Real GDP
(percentage changes)

1.5

1.3

1.2

1.1

1.0

Domestic employment  
(average annual change, in persons)

65 700

67 200

47 000

30 400

24 800

Unemployment rate
(in % of the labour force)¹

6.0

5.5

5.4

5.4

5.4

Inflation (HICP – percentage changes)

2.3

1.3

1.3

1.5

 1.7

Overall balance of general government
(in % of GDP)

-0.7

-1.6

-2.1

-2.6

-2.8

Public debt
(in % of GDP)

100.0

99.1

99.2

99.8

100.5

Source: NBB
15-64-year-olds, gross data.

Date finalised: 27 November 2019. Next publication: June 2020.