The Belgian economy continued to be significantly affected by the coronavirus crisis, although its decline has so far been smaller than originally expected. Instead of an estimated reduction in GDP of up to 7.9% for 2020, there was a decline of only 6.3% last year. Predictions call for a stronger recovery during 2021 and its continuation in the following years, albeit with lower growth than this year. A higher recovery in 2021 will be possible if the restrictive measures are ended soon enough before the end of this year.
Belgium, on the other hand, can count on significant savings of the population, which can support an increase in household consumption after the pandemic. GDP is expected to return to pre-crisis levels only in 2022. Industry and construction have been less affected this year than in the first wave of the pandemic in 2020, yet industrial production is also expected to grow only in 2022. The low inflation rate corresponds to a longer-term situation in the EU.
The federal government has set aside €10.5 billion for 2021 to cover the costs associated with the pandemic, and these costs are expected to reach a total of more than €3billion at the end of the year. This corresponds to an increase in the public debt. Expenditure on temporary unemployment is estimated at €billion in 2021. Both the federal government and the regional governments extended the validity of existing economic measures to help businesses and the self-employed until 30/06/2021 and decided in February to extend them to the value of EUR 2 billion.
Regional governments contribute to affected businesses for their loss, these businesses can take advantage of tax payment deferrals or tax exemptions, moratoriums on loans, bridging rights still apply to self-employed persons, and the maturities of some social security contributions have been extended. Employers can use a form of temporary unemployment for their employees. In March, Belgium adopted measures to mitigate the expected bankruptcies of companies, which were fully blocked until February tr After the improvement of the epidemiological situation and the subsequent end of these support measures, the expected wave of bankruptcies and subsequent layoffs may contribute to the growth of unemployment.
Post-COVID-19 opportunities for foreign exporters
As a result of the coronavirus crisis, the demand in the Belgian market has partly changed, but for the most part the new sector opportunities are related to the program of the new federal government and its priorities in the transformation of the economy. The original opportunities for Czech exports to Belgium in the transport or chemical industry are still valid. The energy sector is an important opportunity for the involvement of companies due to the transition to green energy and the associated technological needs. Other possibilities mainly concern the ICT, pharmaceutical and transport sectors. These sectors are also key areas in the National Recovery Plan, which was submitted to the European Commission at the end of April.
According to allcountrylist, transport and its development and transformation in the spirit of sustainability is in the center of the government’s attention. The modernization of railways, their infrastructure and further connection to the high-speed European network is planned. In the National Recovery Plan, Belgium is counting on expanding the operation of intercity tram routes or renovating and building a subway. The expansion plans are also valid for freight transport, which would use the already existing airports (Liège, Brussels-Zaventem) and the port of Antwerp as international hubs with the ambition to further transport goods by rail in the wider region. The transition to electromobility in Belgium is limited by the lack of the necessary charging station infrastructure for passenger, freight and maritime transport. Here is an opportunity for Czech companies to be involved in supply chains in the modernization and construction of railways, tram networks and electromobility needs (e.g.
Due to the emphasis of the new government in its October 2020 program on the transformation to “green energy” and the use of renewable resources, the focus is on wind farms and the construction of wind parks on the North Sea coast, which are to gradually replace nuclear energy in line with the government’s commitment to fully or mainly to end the operation of nuclear reactors in 2025.
The emphasis is on the conversion of energy obtained from the wind into hydrogen and the use of existing distribution networks to transport this “clean” hydrogen to neighboring countries. Therefore, it is planned to expand the possibilities of storing this energy and the possibilities of its transport by modifying existing distribution networks (gas pipelines). In the future, emphasis is thus placed on hydrogen technologies, even at the regional level (e.g. Wallonia submits projects for hydrogen storage or its production from biomass to the National Recovery Plan).
The transformation of the energy industry is thus an opportunity for the supply of equipment for wind power plants, hydrogen technologies, energy transport and technologies related to the termination of the operation of nuclear power plants. This could also be an opportunity for Czech companies and research institutions.
The covid-19 pandemic as well as the need for digital transformation has promoted an emphasis on ICT in many areas. The government plans to digitize the state administration, including the healthcare sector. During the preparation of the Belgian National Recovery Plan, emphasis was also placed on the digitization project in the field of justice. The area of cyber security could also be an opportunity for the involvement of Czech companies.
Healthcare and pharmaceutical industry
The Belgian government invests in the development of the biotechnology sector, which represents a relatively significant part of the GDP of Wallonia (3.2%) and Belgium. In both Flanders and Wallonia, there are a large number of smaller companies and start-ups focused on innovation, which also operate within technology parks. During the coronavirus crisis, the importance of developments in the field of vaccines and other medicines against covid-19 became apparent. The cooperation of Czech companies with these companies could lead to partnerships and the conclusion of consortia, which would enable, for example, joint drawing from EU programs.