corona

Prendre le pouls des entreprises pour évaluer la santé économique de la Belgique

Mercredi 6/5/2020
Geoffrey Minne / Peter Reusens

The current health crisis and subsequent lockdown measures have provoked a sizable shock for Belgian private companies. A new weekly survey targeting Belgian private companies was launched for the Economic Risk Management Group (ERMG) to gauge the impact of the coronavirus crisis on the Belgian economy. After conducting four waves of the survey, we estimate the average turnover reduction for the entire economy at 33% compared to the pre-crisis situation. The bars, hotels and restaurants industry and the arts, entertainment and leisure industry report a much larger negative impact and one out of five respondents active in these sectors says bankruptcy is probable or highly probable.
Covid-19: een dodelijk virus voor onze overheidsfinanciën?

Mercredi 6/5/2020
André Decoster

The economic shock caused by the CORONA-crisis is unseen and dramatic. In this article we do not try to predict macro-economic consequences. We translate given macro-economic, and inherently extremely uncertain, macro-economic predictions, into its impact on public finance figures. This shows that the transitory nature of the shock, however big, has fundamentally different consequences than long term structural changes in revenues and expenditures. As long as the underlying structural factors remain unchanged, the sustainability of public finances is not fundamentally affected by this huge negative, but temporary, shock.
Efficient Resource Allocation in the Context of the Coronavirus Crisis: Towards a Private Equity Fund Financed by Collective Savings

Mercredi 6/5/2020
Georges Hübner

With the coronavirus crisis, we anticipate an aggravation of the inefficiency of the allocation of financial resources in the Belgian economy, with excess idle savings from households and an increasing shortfall of equity for many companies impacted by the economic downturn. We discuss the conditions under which, on the one hand, the savings surplus could be mobilized, and on the other hand, the corporate world could accept the infusion of outside equity capital. The proposed solution, following standard Asset & Liabilities Management (ALM) principles, is the setup of a private equity fund offering callable, convertible and cumulative preferred shares, funded through the issuance of either (i) a popular bond with floating coupon assorted with the government guarantee, or (ii) an asset backed security with a senior fixed coupon and a junior equity tranche, with the collaboration of the financial sector.
Coronacrisis doet Belgische woningmarkt corrigeren maar niet crashen

Vendredi 17/4/2020
Johan Van Gompel

De Belgische woningprijzen bleven ook in 2019 sterk toenemen, toe te schrijven aan de lage rente, de sterke jobcreatie en de afschaffing van de woonbonus in Vlaanderen begin 2020. De coronacrisis betekent allicht het einde van de langdurige prijshausse in België. De inkomensschok veroorzaakt door de crisis zal de woningvraag vanwege de gezinnen immers zwaar treffen, waardoor de prijzen zullen corrigeren. De aanhoudend lage rente en de toegenomen risicoaversie op de financiële markten zullen de (investerings)vraag naar vastgoed evenwel ondersteunen en de verwachte prijscorrectie beperken. Concreet gaan we ervan uit dat de Belgische woningprijzen in 2020 en 2021 met respectievelijk 3% en 2% zullen dalen. Dit basisscenario, waaraan we momenteel een waarschijnlijkheid toekennen van 50%, is onderhevig aan heel wat onzekerheid. De risico’s zijn vooral neerwaarts gericht en dus zijn sterkere prijscorrecties mogelijk.
Deep Impact: A Scenario Analysis of the Covid-19 Crisis in Belgium

Vendredi 17/4/2020
Xavier Debrun / Philippe Donnay

The sanitary measures adopted on a global scale to contain the Covid-19 pandemic have inflicted a shock never seen before on the Belgian economy, be it in terms of depth or suddenness. Because usual forecasting tools cannot be relied upon in such unique circumstances, forecasters had to turn to scenario analysis and model simulations to get a sense of the macroeconomic impact of the shock. This note discusses the outcome of a scenario prepared by staff from the National Bank of Belgium and the Federal Planning Bureau. Considering a 7-week lockdown followed by a recovery spreading until mid-2021, real GDP is expected to contract by 8 percentage points in 2020, with a strong rebound envisaged in 2021. The scenario is premised on the absence of any significant damage to the productive potential of the economy and on a swift pickup of private consumption from the second half of 2020, reflecting effective protection of disposable income and the unwinding of pent-up demand. On the production side, liquidity stress is considerable but deemed manageable so that solvency is largely preserved. Thus, mass bankruptcies and persistent job losses are not part of the scenario. The expected effect on public finances is commensurate to the shock with a deficit of at least 7,5 percent of GDP and public debt around 115 percent at end-2020.
The Belgian Economy in Corona Times: The Covid-19 Pandemic is Causing an Unprecedented Economic Rollercoaster

Vendredi 17/4/2020
Johan Van Gompel

The corona crisis is taking a high human toll, but clearly also has a significant impact on the economy. In this article, we offer an update of KBC’s economic outlook for the Belgian economy. We are aware that this numerical estimate, even more than in normal times, is uncertain. Nevertheless, we want to provide new economic insights. They take into account the latest developments in the spread and medical impact of the Covid-19 virus and policy responses to mitigate the impact on public health and the economy. In our analysis we take several possible scenarios for GDP growth into account: a base scenario and an optimistic and pessimistic scenario, which we currently assign a probability of 50%, 15% and 35% respectively. In a box added to the article, we also provide an estimate of the impact of the crisis on Belgium’s public finances.
ECB Needs to Finance Corona Budget Deficits

Vendredi 17/4/2020
Paul De Grauwe

Sooner or later, the ECB must accept that monetary financing in support of deficit spending is a necessity not just for mitigating the Corona crisis, but also for averting a downward deflationary cycle that could pull the Eurozone apart. It is time to think outside the box and to set aside dogmas that may be appropriate in normal times but not when we face an existential crisis.