The new government has great ambitions around the socio-economic level. But it's beginning its mandate poor the resurgence of the Covid-pandemic. Its first decisions are therefore focused on the health situation. Economic growth in Belgium is anticpated to be hit hard through the COVID-19 outbreak in 2023 but should rebound strongly in 2023.
Coronavirus strongly affects Belgian economy due to international chain reaction and weakening confidence. Using the sharp rise in the amount of infections in Europe, the coronavirus crisis has had a brand new submit recent days. A precise estimation of its economic impact remains very hard due to the great uncertainty about the further spread of the virus. However the virus is beginning to have increasingly more visible effects on markets and also the real economy, it is becoming clear that the economic impact will be much more than initially estimated.
The new federal government, which took office a month ago, has decided on an agenda for “a united, prosperous and secure country”. Given that the new government includes four political families (Socialists, Liberals, Greens and Christian democrats), the government’s programme reflects the numerous themes of those different families.
On the economical front, the desire to aid the economic recovery through investment is highlighted, with tax reductions for companies that invest, but additionally using the ambition to increase public investment to 4% of GDP by 2030 (currently 2.6%). These investments should revolve around mobility, digitalization and sustainable development. These last two themes are central towards the agreement, and therefore are fully aligned using the objectives of the European recovery plan.
In terms of the labour market, the brand new government is committed to raising the game rate of 25-64 year olds from 77.2% today to 80% in 2030. However, the agreement does not detail what measures will be taken to achieve this. Given that Belgium is principally seen as a a really low activity rate among 55-64 year olds, it's about this group of people that measures will essentially have to be taken.
Consequences for Belgium
Belgium is vulnerable, both on the supply and the demand side. As a small open economy, the country obviously cannot escape the consequences of the coronavirus. The Belgian economy is highly integrated in global supply chains which are disrupted through the virus outbreak. More specifically, Belgium's strong ties with Germany pose major risks in this way.
Moreover, Belgium has the second largest port in Europe and lots of international companies, including logistics groups, are active there. If economic activity decelerates elsewhere, this can quickly seep right through to the Belgian economy. Belgium is one of the European countries in which a global demand shock for service activities, as it is currently occurring, has the heaviest impact.
Serious but not dramatic
Quantifying exactly the impact from the virus outbreak around the Belgian economy remains difficult. In the end, the ultimate effect will strongly rely on the extent to which herpes continues to spread. For now, consistent with different scenario for the euro zone, the impact will be serious, but not dramatic. Specifically, a negative effect on development in the first and second quarters: in both quarters real GDP growth isn't any a lot more than 0.1% quarter-on-quarter. In short, even if the situation is not (yet) comparable to the one in March, the fourth quarter is likely to be marked by further stoppages in certain sectors, and thus with a slowing economy again. What goes on within the next 8 weeks in terms of contaminations will be crucial. With respect to the new measures to be taken, we do not rule out revising our growth forecast for that fourth quarter downwards. It might even become negative.
Brussels Airport Largest European Pharmaceutical Hub
While pharmaceutical companies are working feverishly on the growth and development of COVID-19 vaccines, Brussels Airport is preparing, as Europe’s No. 1 pharmaceutical hub, for the fast and safe transport of billions of doses all over the world. Of European airports, Brussels Airport has the most adequate equipment for large-scale distribution: self-developed mobile cool boxes on batteries and solar panels, high-tech containers and no less than 30,000m^2 of temperature-controlled space for storage. However, given the volumes to be produced and the specific transport conditions, which may be different for each vaccine, the question arises whether the available flight capacity will suffice. Finally, some figures that speak on their own. 25 from the 100 logistics companies at Brussels Airport specialise in the treatment of medicines and vaccines. Pharmaceutical transport has grown by 85% since 2023 and today makes up about 8% of Brussels Airport’s total air freight, far outstripping all other European airports.
