Country Risk Service Belgium 3rd Quarter Updater

  • ID: 4605226
  • Country Profile
  • Region: Belgium
  • 19 Pages
  • The Economist Intelligence Unit
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The BBB rating was unchanged in the June report but the score deteriorated by 2 points, to 31. The rating reflects Belgium's stubbornly high debt load, above 100% of GDP, and failure to generate more significant improvements on the fiscal balance. Nevertheless, the budget deficit is gradually narrowing, and financing costs remain low by historical standards, although yields on government debt will start to tick up gradually from 2018.

The rating remained at A and the score improved to 27. A better economic and institutional outlook for the euro zone has increased the region's resilience to political risk and external shocks, and structural support for the currency comes from a large regional current-account surplus. We expect the euro to average US$1.20:EUR1 in 2018-19, after averaging US$1.13:EUR1 in 2017.

The rating remained at A, reflecting a sustained improvement in the sector's health since the 2008-09 global financial crisis. The Tier 1 capital adequacy ratio came to 16.2% at end-September 2017, and non-performing loans had fallen to 3.1% of total loans. Profitability has slowed since the crisis and remains subdued, in part owing to the low interest-rate environment, but is nonetheless well above the EU average.
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Country Risk Service Belgium 3rd Quarter Updater

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

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

Central scenario for 2018-22: Political stability

Central scenario for 2018-22: Election watch

Central scenario for 2018-22: International relations

Central scenario for 2018-22: Policy trends

Central scenario for 2018-22: Fiscal policy

Central scenario for 2018-22: Monetary policy

Central scenario for 2018-22: Economic growth

Central scenario for 2018-22: Inflation

Central scenario for 2018-22: Exchange rates

Central scenario for 2018-22: 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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