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Country Risk Service Belgium 3rd Quarter Product Image

Country Risk Service Belgium 3rd Quarter

  • Published: July 2013
  • Region: Belgium
  • 21 Pages
  • The Economist Intelligence Unit

A six-party coalition government headed by Elio Di Rupo was finally formed in December 2011, almost 18 months after the general election. Tension between the two linguistic communities will persist and will have an impact on political stability. The hardline separatist New-Flemish Alliance (N-VA) will exploit its position as the main opposition party to boost its popularity further. The coalition's programme of deficit-reduction measures will not be sufficient to eliminate the budget deficit in the forecast period, and government debt will rise above 100% of GDP in 2013. Real GDP declined by 0.3% in 2012, and The Economist Intelligence Unit forecasts a slightly harsher contraction in 2013. The economy will then return to average growth of 1.2% per year in 2014-17. Major downside risks stem from the sovereign debt crisis in the euro area. Inflation averaged 2.6% in 2012 and is forecast to fall sharply in 2013, before recovering to 2.3% on average in 2014-17.

The federal government has launched negotiations with the regions to put in place a competitiveness package, which could try to reduce companies' wage and energy costs.

GDP was in a state of near-stagnation on a quarter-on-quarter and seasonally adjusted basis during January-March 2013, following three consecutive quarters of contraction.

Country Risk Service Belgium 3rd Quarter

Belgium at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Sovereign risk
Current assessment
Rating outlook

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2013-17: Political stability

Central scenario for 2013-17: Election watch

Central scenario for 2013-17: International relations

Central scenario for 2013-17: Policy trends

Central scenario for 2013-17: Fiscal policy

Central scenario for 2013-17: Monetary policy

Central scenario for 2013-17: Economic growth

Central scenario for 2013-17: Inflation

Central scenario for 2013-17: Exchange rates

Central scenario for 2013-17: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

Foreign payment and liquidity indicators

External trade

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