Belgium’s gross domestic product (GDP) contracted by 5.7% in 2020, its worst performance since World War II, while the public deficit reached 9.1% last year, never before. seen since the mid-1980s, according to detailed accounts for 2020, the year of reporting by the pandemic, published Monday by the Institute of Nationals.
The public deficit has widened with the economic contraction due to lockdowns, combined with massive public support measures to deal with the health crisis. “Revenues decline by nearly 10 billion euros, while spending increases by almost 22 billion“, underlines the ICN. Result of the course: the debt ratio exploded last year, to 112.8% of GDP, up 15 percentage points compared to 2019.
Declining work volume
Despite the collapse of part of the economy, employment measured in number of people employed remained stable in 2020: the number of employees admittedly decreased by 0.4% (or -15,200 people), but these losses are offset by the net creation of self-employed jobs similar to those of previous years (+ 1.7% or +14,300 people). On the other hand, the volume of work fell sharply (-8.5%) in 2020, fully absorbing the drop in activity.
Finally, the ICN stresses that the pandemic has also significantly changed the savings behavior of economic players. Thus, the financing capacity of households more than quintupled in 2020, reaching 28.7 billion euros or 6.3% of GDP.
A similar movement, although on a smaller scale, was observed at the level of companies, whose financing balance more than tripled in 2020, reaching 15.9 billion euros, or 3.5% of GDP.