Economy: Belgium will be hit hard by lockdown 2.0

Just like the other countries in the Eurozone, Belgium will have to face negative GDP growth in the Q4 2020 following re-confinement. However, our country will be harder hit than the rest of the Eurozone, according to forecasts by Euler Hermes (Allianz), world leader in trade credit insurance. The expected negative growth of the Belgian GDP in the last quarter of the year will be -7.5%, compared with -4.1% for the Eurozone as a whole.

Belgium is not only one of the countries hardest hit by the second sanitary wave of Covid-19. The economic impact will also be very hard. Several factors explain this: the duration of the confinement (6 weeks) and the nature of the measures taken, which are more drastic than in other countries. According to Euler Hermes, nearly 40% of Belgian household spending is sensitive to Covid-19 restrictions and 70% of GDP will be impacted by this lockdown.

Ed Goos, Euler Hermes BeLux CEO:

At the Eurozone level, "lockdown 2.0" and "lockdown light" should follow epidemic cycles until a post-vaccine return to normal in 2022. However, these new restrictions are not a repeat of last spring. There are two major differences: the economic impact of the measures on GDP in Q4 2020 is expected to be up to 60% less than last spring in most countries, and the recovery after de-confinement will be more moderate in 2021.

In Belgium too, Euler Hermes expects a more gradual de-confinement than after the first wave. As a result, the positive effects for the economy will be delayed and will not occur before March or April 2021, according to the trade credit insurer's forecasts.

Ed Goos said:

According to the latest Euler Hermes forecasts, Belgian GDP growth should reach 2.5 to 3% in 2021, after a decrease of -8.5% expected for the whole of 2020.

Read here the full Eurozone report of our economists.

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