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Belgium Country Risk Reports Q2 2015

Belgium Country Risk Reports Q2 2015

Core Views

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
Autos
TABLE: Autos Total Market – Historical Data And Forecasts
Telecommunications
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, %

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