A European-wide recession was narrowly avoided despite the energy price shock of 2022. However, economic growth remains weak in Europe in the second half of 2023. Exports are suffering from the slowdown in global trade, due in part of a reorientation of consumer interest in favor of domestic services after the Covid restrictions. Economic growth in the euro zone is estimated at 0.7% in 2023. Belgium, unlike Germany and the Netherlands, was able to avoid a recession thanks to the importance of its services sector and automatic indexations. income that supported purchasing power. This offsets the decline in exports. Belgian GDP is expected to grow by 1.0% in 2023, and employment to increase by 50,000 people.
In 2024, the European economy is expected to benefit from a recovery in global trade and more dynamic household consumption, stimulated by a slowdown in inflation and wage increases. GDP growth in the euro zone would thus rise to 1.1%. In this context, Belgium’s exports should start to rise again, while the growth of domestic demand should be practically stable. Consequently, the expected growth of Belgian GDP amounts to 1.3% and would go hand in hand with the creation of 40,000 jobs.
Inflation in Belgium fell to 4.1% in August 2023, coming from a peak of 12.3% in October 2022. This decline would continue until October. Due to the recent increase in international oil and gas prices, inflation is expected to rise again in November and only decline in the second half of 2024. As an annual average, inflation is forecast at 4.4% in 2023 and 4.1% in 2024.
Economic growth has been revised downward by 0.3 percentage points in 2023 and in 2024 compared to the outlook last June from the Federal Planning Bureau. This revision is mainly due to a deterioration in the international environment. In addition, the upward revision of inflation weighs on the dynamics of household consumption in 2024.
Originally published at Almouwatin.com
