Arne Maes, economic advisor at BNP Paribas Fortis, expects economic activity to increase by 1.2% in 2016.
Real wages will rise more slowly, keeping consumption growth low, but this will be more than compensated for by an increase exports and investments.
Belgium's Country Specific Report, published earlier this year by the European Commission, once again emphasised the need to tackle the country's weakened position in terms of competitiveness when compared with other countries. The Michel I government's wage reduction policy, of which the index jump is a major part, was the first step in the right direction.
Since late 2014, wage growth has slowed considerably in Belgium, with labour costs remaining stable in the final quarter of 2015. In this way, export companies' competitive disadvantage – built up over the years – is being systematically broken down.
The tax shift, which reduces taxes on labour, must also be seen in this context.
By reducing social security contributions, labour costs can be brought even closer to the levels of neighbouring countries. As a direct consequence of this, real wages in 2016 will hardly rise at all. The increased growth in employment figures, partly due to the incentives provided by the tax shift, do not fully compensate for this effect. Private consumption is therefore increasing at a slower pace than in 2015.
Trade with other countries is expected to provide the main growth contribution to GDP (Gross Domestic Product).
While disappointing levels of activity in emerging countries – including the so-called BRIC countries – is causing severe strain on different EU Member States, Belgian export activity remains largely unaffected. In fact, some 75% of the turnover of exporting companies will be generated by intra-EU trade. Now that the aforementioned policies are slowly beginning to bear fruit, export growth is expected to continue.
Government spending will, for the most part, have to remain at a stable level for the next few years. This is a direct consequence of its goal of eliminating the structural deficit by 2018.
Nevertheless, we expect the public deficit in 2016 to be similar to that of last year, i.e. 2.6% GDP. The deficit could not be reduced quicker due to extra budget expenditure on migrant reception and security, which together accounted for 0.3% of GDP.
Thanks to the European Central Bank's low interest rate policy, the interest burden on outstanding public debt can be refinanced more cheaply. Ideally, this surplus should be used to swiftly reduce the total debt, as it currently remains very high at 107% of GDP.
Our bank sponsors the Export Lion Awards for the first time
On 23 September, Flanders Investment & Trade (FIT) will be hosting the 19th Export Lion Awards, an event that celebrates Flemish companies with outstanding export results. BNP Paribas Fortis is happy to support this initiative.
In 2005, the Flemish government established the Flanders Investment & Trade (FIT) agency to promote international business in Flanders. FIT was the result of a merger of Export Flanders and the Flemish Service for Investment. The organisation aims to promote international entrepreneurship in Flemish companies, particularly SMEs.
FIT has its headquarters in Brussels and has 96 offices worldwide, five of which are based in Flanders. The agency provides information and assistance to Flemish investors and exporters free of charge.
Partnership with BNP Paribas Fortis
This year FIT is organising the 19th Export Lion Awards on Wednesday 23 September, an event that puts Flemish companies with exceptional export results in the spotlight. As the number one import and export bank, BNP Paribas Fortis is pleased to support this event as a sponsor. We are highly committed to our encouragement of Belgian exporting companies, and therefore the economy in general. Our many years of expertise in international trade finance and our global network of experts make us the perfect partner for companies with (future) international operations.
"We are proud that Belgium is one of the top 15 export countries in the world, and we are happy to give our exporters a boost by sponsoring the Export Lion Awards", Frank Haak, Head of Sales Global Trade Solutions at BNP Paribas Fortis, says.
Everything you need to know about the event
- What? Sparkling online award ceremony followed by a virtual networking event
- Where? At 6 locations and live from Ghent
- When? Wednesday 23 September, from 6 p.m. to 8 p.m.
- Entry fee?Free, but advance registration is recommended
Do not miss this inspiring evening!
You will receive an email with a link to the event's live stream a day before the award ceremony.
BNP Paribas Group, first quarter 2020 results
Excellent business drive in the quarter impacted by an unprecedented health crisis
The health crisis has had major repercussions on macroeconomic outlook and produced extreme shocks on the financial markets. After a quarter in line with the 2020 objectives of BNP Paribas, health crisis related developments had several major negative impacts on the first quarter 2020.
Commenting on these results, Chief Executive Officer Jean-Laurent Bonnafé stated:
“In response to the health crisis, the Group’s teams have mobilised around the world to contribute to the functioning of the economy and its financing. Our concerns have been to protect our employees who are fully mobilised to ensure banking services, to quickly implement solutions to support the financing of our corporate, institutional and individual clients, and to launch in all regions where we are present a plan for emergency donations to the hospital sector and organisations committed to assist vulnerable people.
At the end of a quarter supported by an excellent business drive, in line with its 2020 objectives, the results of BNP Paribas for the 1st quarter 2020 were impacted by the harshness of the health crisis. The good resilience of revenues and results despite this shock demonstrates the robustness of the Group’s diversified and integrated model. With all teams at BNP Paribas, whose I want to thank tireless commitment to serving customers and providing support to society, we will continue our efforts to mitigate the impact of the crisis on the economy and prepare for the future.”
Press Release: https://invest.bnpparibas.com/documents/1q20-pr-23455
Test it here: how sustainable is your organisation?
BNP Paribas Fortis' Sustainable Business Competence Centre (SBCC), which helps companies transition to a sustainable business model, has developed a test to help you determine your company's progress in achieving sustainability. You can set to work immediately with the results of this test.
As Belgium's largest bank, BNP Paribas Fortis wants to drive socio-economic development in our country. This development requires companies to transition to a sustainable business model. As this is not particularly straightforward, BNP Paribas Fortis wants to make its expertise available to its customers.
One of the SBCC's initiatives is a brand-new test aimed at corporates, SMEs and institutional customers. The test consists of 15 questions relating to the steps you need to take to become more sustainable: awareness, diagnosis, quick wins, business model and cooperation and innovation. Once you have finished the test, you will receive the results in your mailbox instantly.
The SBCC uses your answers to make practical recommendations for your journey towards more sustainable entrepreneurship. In addition, we have all the resources needed to guide you throughout your transition from start to finish:
- technological expertise in high-tech, ICT, biotech, medtech, clean and green tech, and more
- a network of companies and business associates
- financial products and services that facilitate the transition to a sustainable model
Is your organisation ready for a sustainable future?
BNP Paribas Group, second quarter 2019 results
The business of BNP Paribas was up this quarter in a context where economic growth remained positive in Europe but slowed down, implying expectations of a continued low interest rate environment.
Director and Chief Executive Officer of BNP Paribas, Jean-Laurent Bonnafé:
“BNP Paribas delivered in the first half an increase in net income at 4.4 billion euros. Revenues were up thanks to business growth in the operating divisions. Operating expenses were well contained and benefitted from the transformation plan, generating a positive jaws effect. The common equity Tier 1 ratio rose to 11.9%, illustrating the Group’s solid balance sheet. New digital experiences rolled out for customers are a success and the Group is actively executing its ambitious policy of engagement in society. I would like to thank all the employees of the Group for their dedicated efforts to achieve these good results. ”