National Bank of Belgium doesn't expect a recession

Due to the rising energy costs, the National Bank of Belgium (NBB) expects a temporary slowdown of the Belgian economy. However, spring estimates of the central bank say it will not come to a real recession .

The Belgian economy will slow down "temporarily but clearly" this quarter and the next quarter, according to the NBB. Only in autumn growth will pick up again. But the Bank does not see any signs of a severe recession. It is possible that we will have a few quarters of negative growth. But a technical recession is not a drama, according to Governor Pierre Wunsch. After all, a slowdown of the economy is a weapon in the fight against inflation. 

This translates into an expected GDP growth of 2.4% this year and 1.5% next year. In 2024, 2% growth is expected.

Despite the slowdown in the economy, the labour market continues to pick up, although the National Bank of Belgium expects the pace of job creation to slow down somewhat. The unemployment rate is expected to fall to 5.5% by 2025. "For Belgium, that is an ultra-low level," said NBB economist Geert Langenus.

The National Bank is taking a cautious approach. After all, there are still lots of uncertainties. "We assume a scenario in which there is no escalation of the war in Ukraine and of the sanctions against Russia, and in which the supply chains normalise again," said Langenus.

(TOM)

© BELGA PHOTO LAURIE DIEFFEMBACQ