Executive Search in Belgium – 2020 Outlook

Robust economy heads for a cooling off

Growth of economic activity in Belgium has remained surprisingly robust in comparison with euro area growth up to now, but should cool down little by little, under the influence of steadily moderating domestic demand.

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 to 2022, 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 fall progressively to 1% by 2022.  Over the period 2019-2022, 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 being at 1.3% in 2019, it is projected to rise to 1.7% by 2022. The public deficit is at 1.6% of GDP for 2019, and is expected to rise to 2.8% of GDP by the end of 2022.

Here are a few other practical insights how life in Belgium is changing since the start of 2020…even for the politicians:

  • The majority of banks are raising their fees – with the cost of certain accounts and security boxes set to rise as well as posted bank statements.
  • The level of sustainable biofuels in fossil fuels – diesel and petrol – rises according to a ratified decision by cabinet ministers at the beginning of November. The new rules follow compulsory EU directives (8.5% biofuels in one litre). Belgium goes a step further in its climate goals, increasing from 5% (lead 98) and 7% (diesel) to 9.6% biofuels per litre. The price of petrol and diesel will rise by one to two cents a litre.
  • Beers brewed by AB InBev and Alken-Maes increase in price at supermarkets and in cafes and restaurants.
  • Banks need to exercise more caution in granting mortgage loans after the BNB and European Systemic Risk Board (ESRB) found an increased vulnerability in the Belgian mortgage market.
  • All consultation fees for doctors increase, although the extra cost will be reimbursed by medical insurance companies.
  • Members of parliament risk being fined if they are absent too often. Absences without justification for more than 20% of plenary sessions, or committees, could result in a 10% reduction in payment.

Contact Peter Buytaert for additional discussions.