At a press conference held on Monday morning the National Bank of Belgium (NBB) has said that the Belgian economy will probably be able to avoid entering a recession. An economy is said to be in recession when it has experienced negative growth during two consecutive quarters.
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National Bank sees no signs of a recession in Belgium, but repeats concern about “untenable” public finances
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During the presentation of its autumn projections the National Bank said that it believed that this would not be the case here in Belgium. However, the bank’s Governor Pierre Wunsch (photo above) reiterated concerns about the state of Belgium’s public finances.
During the past year the Belgian economy has shown itself to be more robust than had been expected. This is particularly true when it comes to consumption by the country’s households.
During the third quarter of 2022 there was modest economic growth. However, negative growth is a distinct possibility during the fourth quarter. Nevertheless, this is not yet a certainty. The National Bank of Belgium expects the fourth quarter of 2022 to be the low point of the economic downturn. The bank expects the economy to pick up again next spring. Next year economic growth is expected to be 0.6%.
Concerns about public finances
During the press conference the Governor of the National Bank of Belgium Pierre Wunsch repeated concerns about the start of the public finance in the medium term.
“There is a risk of them spiralling out of control”, Mr Wunsch said. If there is no change in police NBB forecasts that during the coming years, the budget deficit will increase by 5% each year to almost 112% of GDP in 2025.