Economic news and analysis

Our forecast of the current year, in collaboration with Ghent University, has quarterly growth at 0.3%. This represents a slight improvement on the NBB’s most recent flash estimate for Q4, which stood at a mere 0.2%.

Europe is pinning its hopes on the knock-on effect of Germany’s commitment to increasing public investment to modernise the country and bolster its defence capabilities. But less than a year after the new German chancellor took office, doubts are beginning to emerge.

China may dominate rare earths, but its public finances are under growing strain. Rising debt, widening deficits, weak consumption and a faltering property market are forcing Beijing to reform tax collection and rein in spending. Welcome to the realities faced by developed economies.

The American President, Donald Trump, has once again dropped his threat to impose additional trade tariffs. However, even without these extra import duties, the European automotive sector is struggling to survive due to significantly higher electricity costs and competition from much cheaper Chinese electric vehicles. This, combined with the accelerated electrification of the vehicle fleet, is leading to a structural crisis.

Our latest nowcast, which looks back at the recently concluded fourth quarter, indicates continued growth in the Belgian economy. At 0.3%, growth remains resilient, but the models used nevertheless indicate a slight slowdown.

While the international order is being shaken to its core, the financing of Europe’s prosperity model is coming under increasing pressure. More growth could provide relief, but where can it be found? One possibility is stronger intra-European trade. Our analysis shows that Belgian exports to other EU member states are €10 billion lower than expected. Recognising this missed export potential could encourage entrepreneurs to take action and even inspire policymakers to organise an intra-European trade mission.