27 March 2020

Sectoral impact of the coronavirus on Belgium

Charlotte de Montpellier

Charlotte de Montpellier


Philippe Ledent

Philippe Ledent

Expert Economist

We map the threats to the Belgian economy and the exposure of the various sectors in a structural way.

Watch the analysis of Philippe Ledent.

In a nutshell

In recent weeks the economic context, which was already not very promising, has deteriorated rapidly. The main cause is of course the expansion of the coronavirus epidemic. But the shock could be much bigger than the direct effect of the epidemic.

  • The inability to produce or sell and the reflex to consume less have an impact in the short term on the value added of businesses (and thus on GDP), but can also lead to financial distress (lack of liquidity).
  • Concerning the disease itself, a second wave of the epidemic in China is not expected. It is also assumed that the duration of the epidemic in the various affected countries will be of the same order of magnitude as in China, i.e. two months.
  • In Belgium, 76% of the materials used by companies in the construction and vehicle assembly sector come from abroad. In the metal industry, 56% of inputs are imported, while 71% of inputs are imported in the travel agency sector and 68% in the chemical industry.
  • As the Belgian economy is a small, very open economy (40% of the actual value created in Belgium is the result of foreign demand), many sectors depend heavily on exports to sell their goods or services.
  • For example, a 5% drop in foreign demand for legal, accounting and headquarters activities would have an impact of 0.35% on total value added in Belgium (i.e. GDP), while the same shock would have an impact of 0.23% on wholesale business (excluding vehicles).

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