The Belgian economy is recovering well, but Euler Hermes expects that it will take a little more time for GDP to return to its pre-Covid-19 level. According to the global leader in trade credit insurance, this will only be the case in the course of 2022, as the firm catching up will only take place towards the end of this year and next. In addition, there are many obstacles that could spoil the fun.
Exports on the rise
For 2021, Euler Hermes forecasts GDP growth of 3.5% in Belgium and 4.0% in 2022. This is one of the conclusions of the "Grand Reopening" report by Euler Hermes, part of Allianz.
The recovery of the Belgian economy is supported by the progress in the vaccination campaign and by Germany (+3.4% in 2021), France (+5.4%) and the Netherlands (+3%), our main trading partners. In the rest of the world, the recovery in the United States (+6.3%) and China (+8.2%) is remarkable. Globally, Euler Hermes forecasts GDP growth of 5.5% in 2021, compared with a spectacular 3.5% decline in 2020 due to the coronavirus crisis.
Euler Hermes expects a EUR20 billion rise in Belgian exports in 2021, mainly in the following sectors: energy, metals, chemicals, pharmaceuticals, automotive and agri-food.
Container from Asia to Belgium: 5 times more expensive
The strong economic recovery is being felt all over the world. But according to Euler Hermes, this does not mean that we are automatically in an economic boom. According to the trade credit insurer, there are a number of obstacles that could disrupt the situation: the sharp rise in commodity prices, the expected tightness in the labour market and the disruption of supply chains, which is at the same level as during the Covid-19 peak last year. Global supply constraints for raw materials and computer chips are a direct consequence. "Sending a container from Shanghai to Antwerp is now five times more expensive than in October 2020. These are all threats that could derail the recovery," warns Euler Hermes.
Raising prices
Companies are facing higher costs and the key question, according to Euler Hermes, is whether companies are able to raise their prices. "In the current situation, price increases are essential for companies to remain financially sound. But you have to be able to do that as a company. If your customer goes away, it doesn't help you much," concludes the credit insurer. A study by Euler Hermes shows that price increases are not an option for most European companies in the short term.
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