Euro pushes economy to brink of recession

21 June 2005

BRUSSELS — The Belgian economy is on the brink of recession, employers association VBO warned on Tuesday.

The VBO expects just 1 percent growth this year, before recovering in 2006 to 2.1 percent.

The half-yearly VBO economic survey has revealed that business economic expectations have fallen since December 2004, newspaper ‘Het Laatste Nieuws’ reported.

Half of the VBO sectors (53 percent) negatively rate the current economic climate, compared with 10 percent six months ago. Just 18 percent of the business sectors are positive about the economy.

There was slight fall in economic activity in the first quarter of this year. The second quarter is expected to show a slight growth, meaning the economy narrowly escaped skipping into recession.

Economist Edward Roosens attributed the poor economic results to the high euro and domestic inflation.

A lower euro will help lead to an economic recovery next year.

Improved performances in Germany and the Netherlands and planned tax reform in 2006 will also have a positive affect.

Subject: Belgian news