The economic recovery in Belgium is gaining further traction in the course of the year, especially from the summer onwards, thanks to the progress made with the vaccination campaign which now makes a gradual relaxation of the restrictive measures possible. In 2021, the economy is set to grow by 5.5 % on an annual basis and GDP will thus get back to its pre-crisis level by the end of the year, after which the pace of growth will gradually normalise.

The Belgian recovery in the first quarter continued to outpace that in the euro area, as real GDP increased by 1 % while the euro area economy contracted further. Our forecasts point to a further acceleration to 1.3 % in the current quarter. The gradual lifting of the containment measures will reinforce the rebound of private consumption in particular.

The recent easing of restrictions triggered a significant improvement in turnover in some specific branches of activity, such as non-medical contact professions and the arts, entertainment and recreation sector. Nonetheless, there has been hardly any reduction in the overall loss of turnover incurred by the Belgian economy as a result of the coronavirus crisis. Similarly, turnover forecasts still imply (limited) persistent damage while other indicators, such as perception of the bankruptcy risk, have clearly improved this month.

Thanks to a solid starting position, the Belgian financial sector was able to complement public support measures for severely affected companies and households with payment deferrals for current loans and additional lending, without jeopardising financial stability. The sector will now also have to play a key role in economic recovery.