Belgium Country Risk Reports Q2 2015
Economic growth will be constrained by the introduction of austerity measures by the incumbent government. Significant fiscal cutbacks will dampen disposable income and consumer spending during 2015-2016.
Belgium's extremely high national debt continues to leave it exposed to a potential deterioration in economic growth exasperating debt servicing pressure and also the possibility of yields increasing due to eurozone instability.
Major Forecast Changes
We have revised down our 2015 real GDP growth forecast to 1.3% from 1.6% previously.
In light of industrial action we have revised down our Short-Term Political Risk Index score for Belgium to 64.2 out of 100, down from 66.7 previously.
- Executive Summary
- Core Views
- Major Forecast Changes
- Key Risks To Outlook
- Chapter 1: Political Outlook
- SWOT Analysis
- BMI Political Risk Index
- Domestic Politics
- 'Kamikaze' Coalition To Continue Tough Reform Policy
- The newly formed government will face significant challenges fro m strong trade unions in the coming months as it attempts to en act
- proposed labour market reforms. Spending required to bring abou t this change will also make fiscal consolidation difficult in th e
- near term.
- TABLE: Political Overview
- Long-Term Political Outlook
- Unity To Prevail Despite Rising Flemish Separatism
- Flemish separatism will remain a major political risk facing Belgium over the coming decade, spurred by economic as well as cultural
- and linguistic divisions. An outright dissolution of the state is unlikely given the still sizeable proportion of the population that supports
- union, but further autonomy for the Flanders region will be required over the next decade to placate separatists.
- Regional Political Outlook
- EU Headed For Fresh Political Crises
- The rise of far-left, far-right and other anti-establishment parties will cause significant problems for EU policymakers over the next few
- years. While most of these non-traditional parties are unlikely to win power, mainstream parties will adopt some of their rhetoric to woo
- their supporters. This means less progress trimming budget deficits in the eurozone periphery and more opposition to the EU's 'freedom
- of movement for workers' principle in Western Europe.
- Chapter 2: Economic Outlook
- SWOT Analysis
- BMI Economic Risk Index
- Economic Activity
- No Significant Growth Acceleration In 2015
- We expect Belgian real GDP growth to broadly maintain its current pace of around 1.0 in 2015 due to the adoption of tighter fiscal policy
- and a subdued outlook for the wider eurozone. After this we expect a slight acceleration to 1.3% y-o-y in 2016.
- TABLE: Economic Activity
- Regional Monetary Policy
- Q&A On ECBQE
- TABLE: European Central Bank – Capital Key for Eurozone Members
- Chapter 3: Key Sectors
- TABLE: Autos Total Market – Historical Data And Forecasts
- TABLE: Telecoms Sector – Wireline – Historical Data & Forecasts
- TABLE: Telecoms Sector – Mobile – Historical Data & Forecasts
- Other Key Sectors
- Table: Pharma Sector Key Indicators
- Table: Infrastructure Sector Key Indicators
- Table: Oil and Gas Sector Key Indicators
- Belgium Q2 2015
- Chapter 4: BMI Global Assumptions
- Global Outlook
- New Era For Oil
- Table: Global Assumptions
- Table: Developed States, Real GDP GrowtH, %
- Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
- Table: Emerging Markets, Real GDP Growth, %