The COVID-19 pandemic poses challenges to the financial sector and financial stability. But the Belgian financial system, thanks to its capital and liquidity buffers, is solid and can thus play a key role in cushioning the impact of the crisis on households and businesses.

Belgian firms reckon that their turnover is still 17 % below pre-crisis levels, which is only about half the impact declared during the weeks in lockdown. This amounts to a recovery of six percentage points in the space of two weeks and nine percentage points in the space of a month. 

The consumer confidence indicator has recovered for the second month in a row. The lowest point seems to have been reached in April, although consumers remain very pessimistic about the expected trend in unemployment.

• The recovery will be partial: the economy has suffered permanent damage
• Household consumption is expected to recover more quickly, but businesses are postponing their investments
• By 2022, the government deficit would be twice as high as it would have been without the crisis.
• To learn more, watch our video below or view the recording of our webinar with Governor Wunsch.

Belgian GDP growth should take a steep dive in the second quarter of 2020, according to the Business Cycle Monitor of June 2020.

Companies surveyed point to a 26 % drop in turnover compared with pre-crisis levels, 5 percentage points better than the previous survey and the best result since the first survey carried out at the end of March. This improvement is mainly due to the trade and building sectors, while the situation is still critical in the catering and accommodation and arts, entertainment and recreation sectors.