H12: Economische impact van de coronacrisis en de oorlog in Oekraïne, met speciale focus op de Belgische economie Flashcards Preview

internationale omgeving > H12: Economische impact van de coronacrisis en de oorlog in Oekraïne, met speciale focus op de Belgische economie > Flashcards

Flashcards in H12: Economische impact van de coronacrisis en de oorlog in Oekraïne, met speciale focus op de Belgische economie Deck (24)
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1
Q

Hoe voorspellen in onzekere tijden?

Covid-19: welk soort schok?

A

The global Covid-19 shock is unprecedented in recent history and is simultaneously:
• a human shock as most countries worldwide face a massive health crisis
• a supply shock coming from a reduction in intermediate inputs (due to disruptions in transport and global value chains) and a reduction in labour (directly because workers were sidelined by the virus and indirectly due to travel restrictions and workers staying home to take care of sick family members or children)
• a demand shock coming from reduced consumption due to the lockdowns (closed shops, bars, restaurants,…; no international tourisms and travel,…) and due to increased uncertainty (more precautionary savings and wait-and-see attitude)
• a financial shock (???) coming from companies massively going bankrupt with in the end possibly a new financial crisis → NO: by now, we can say that a financial shock has been prevented, thanks to massive government support

2
Q

Bij aanvang crisis voorjaar 2020: twee extreme visies (1)

A

This is not a normal recession, but a temporary standstill, due to Covid-lockdown
measures:
• “The car doesn’t drive because of the red light, not because the engine is not working. Once the light turns green, the car will drive again, although some cars will restart faster than others.”
▪ Effective policy response “whatever it takes, whatever it costs”:
• Maintains the economy hibernated, i.e. keeps the productive capacity ready for a post-coronavirus restart
• Vicious cycle prevented, no massive lasting damage
• Weak firms will go bankrupt, but will be replaced be new firms (i.e. normal
functioning of the market)

3
Q

Bij aanvang crisis voorjaar 2020: twee extreme visies (2)

A

The shock from Covid-19 is likely to unleash several behavioural and structural
shifts, or accelerate existing trends, that could condition the economy for more
years to come:
• Lasting changes in the behaviour of consumers and businesses (more cautious, 1.5 meter economy, delay of investments,…) and governments (restructuring of public finances)
• A substantial number of businesses going bankrupt
• Higher (structural) unemployment for a longer period of time
• Increased protectionism and deglobalisation
• …
▪ Meaning in the end: lower potential GDP growth in the years ahead

4
Q

Analyse van de internationale conjunctuur

Wat is de gebruikelijke aanpak?

A

High-frequency indicator watching:
• Soft indicators/surveys: consumer/producer confidence, export orders,…
• Hard indicators: industrial production, retail sales, labour market data,…
→ Inschatten hoe de verschillende bbp-componenten (consumptie, investeringen,
netto-uitvoer) het huidige en de volgende kwartalen zullen evolueren
▪ Gebruik van diverse tools en modellen:
• Tool decompositie bbp-groei
• Now-casting modellen, VAR-modellen,…

5
Q

Covid-19: visie KBC Economics mei 2021

A

OPTIMISTIC SCENARIO
BASE SCEARIO
PESSIMISTIC SCENARIO

6
Q

optimistic scenario

A

> Economy
Already in the first half of 2021, a steep and steady recovery will lead to a faster return to pre-corona activity levels + inflationary tendencies due to very strong (fiscal) stimulus. The recovery will be supported by a sharp
improvement of consumer and business confidence, leading a rebound of consumption and investment growth.

> Virus evolution
Virus spread and impact faster under control thanks to earlier than expected large-scale availability of (vaccine(s)),allowing a sooner lifting of social distancing measures and other precautionary measures.

7
Q

base scenario

A

economy: The economic damage of the second wave is limited
compared to the first wave, as more targeted lockdowns temper the overall impact on GDP. The announcement and roll-out of vaccination campaigns will gradually restore consumer and business confidence. However, as the vaccination process will take time, the recovery will be gradual. It will take until the second half of 2021 for the mass roll-out of vaccines to reinforce the recovery. Fiscal stimulus will further support growth, while keeping
inflation moderate.

virus evolution: Virus spread and impact sufficiently under control
thanks to continued and material social distancing
and other precautionary measures. The start of
vaccination and wider testing and tracing will only
allow a very moderate easing of precautionary
measures in H1 2021. From mid-2021 on, the
normalisation of socio-economic interactions will
be helped by the mass roll-out of effective
vaccines. However, as the vaccination process will
take time, a full relief of social distancing measures
and normalisation of socio-economic interactions
will not happen before 2022. A third pandemic wave
(with severe economic impact) will be avoided.

8
Q

pessimistic scenario

A

economy: During 2021, another (series of) shock(s) takes place,
leading to an interrupted and unsteady recovery
path. Consumer and business risk aversion remain
high, weighing on consumption (much higher
savings rate) and investment demand.
The negative growth impact of on-off lockdowns
will be enhanced by increasing bankruptcies and
unemployment. As the economy partially
restructures, the pace of the recovery to potential
output will be slow.
Activity levels remain well below the pre-corona
levels for some time to come + disinflationary
tendencies.

virus evolution: The virus reappears and continues to weigh on
society and economy, because of setbacks in the
vaccination process (e.g. logistical problems,
disappointing immunity results, …) or insufficient
socio-political support for maintaining sufficiently
stringent precautionary measures for a sufficiently
long period of time.
This necessitates on-off (partial) lockdown periods
that have a strong impact on economic activity.

9
Q

covid 19: 4 dubbele shock

A

> a human shock as most countries worldwide face a massive health crisis
a supply shock coming from a reduction in intermediate inputs (due to disruptions in transport and global value chains) and a reduction in labour
a demand shock coming from reduced consumption due to the lockdowns (closed shops, bars,restaurants,…; no international tourisms and travel,…) a
a financial shock (???) coming from companies massively going bankrupt with in the end possibly a new financial crisis → NO: by now, we can say that a financial shock has been prevented, thanks to massive government support

10
Q

financiële shock: covid 19

A

> door massieve overheidsondersteuning is een financiële shock uit kunnen blijven

11
Q

scarring

A

> blijvende impact van covid

> WEL in europa, NIET in de vs

12
Q

Europees perspectief - Eurozone

A

Vertrouwen van consumenten en producenten piekte na corona, maar vooral consumentenvertrouwen opnieuw zwaar onderuit sinds invasie Rusland in Oekraïne

13
Q

Europees perspectief - Eurozone

A

> Na sterk herstel in Q3 2020, opnieuw negatieve groei tijdens nieuwe
covid-19 golf. Landenverschillen inzake mate waarin bbp-niveau van
vóór de crisis terug is bereikt

> Vertrouwen van consumenten en producenten piekte na corona, maar
vooral consumentenvertrouwen opnieuw zwaar onderuit sinds invasie
Rusland in Oekraïne

14
Q

Internationaal perspectief – Verenigde Staten

A

Bijzonder zware directe impact van covid-19 op de arbeidsmarkt,
maar intussen is werkloosheidsgraad terug op precrisisniveau

15
Q

Why Belgium’s energy inflation is so high

A

> Belgian energy inflation is more sensitive to short-term changes in wholesale prices, leading to a more direct transmission of energy price fluctuations into
the headline inflation
The proportion of variable contracts for electricity and gas in Belgium is larger than in the neighbouring countries or the euro area, where it is mainly fixed contracts that are offered.
Belgium has a greater weight of the variable component (i.e., energy
component) in gas bills and in the price of liquid fuels (cf. low excise duties on heating oil, low network tariffs for gas), meaning a more substantial pass-through of wholesale energy prices to consumer prices.

16
Q

What the war means for consumers

A

> Higher energy bills will impact purchasing power as the mechanism of automatic wage indexation mechanism (1) does not fully offset the price hike, (2) kicks in with the usual lag.
The impact will be highest for lower-income households who spend a larger portion of their income on energy. More generally, Belgian households’ energy consumption is quite high.
High energy costs (and prolonged uncertainty if the conflict continues) may also impact consumer confidence and, hence, precautionary savings

17
Q

What the war means for companies

A

The direct impact on GDP growth via net
exports is estimated at some 0.1 pp. Although
this looks small, there might be additional
indirect effects through the impact of the
conflict on Belgium’s trading partners.
▪ Supply disruptions could occur for energy and
non-energy materials or other essential inputs
in specific industries (e.g., around 5% of
metals imported into Belgium come from
Russia), thus adding to the already existing
supply-side bottlenecks in the economy

18
Q

Despite the clouded outlook, there are still a

number of positive elements:

A

> The improved health situation and the removal of all restrictive Covid measures should support spending.
▪ The labour market is doing well so far and has become tight again, with still an estimated 25 000 extra jobs being created in 2022.
▪ The Belgian government took measures aimed at helping households cope with steep energy bills.

19
Q

Bankruptcy wave on the way after all?

A

The number of bankruptcies is on the rise again. The new shocks from the
Ukraine war (rising energy/material/labour costs, worsening supply problems,
reduced product demand) are likely to increase that number further

20
Q

strengths belgische economie

A

> Well-diversified economy
▪ Wealthy and skilled population with high standards of living
▪ High quality of educational system (especially in Flanders)
▪ Strong international orientation (especially in Flanders)
▪ Central position in Europe & good basic infrastructure (cf. ports
of Antwerp and Zeebrugge)
▪ High net international investment position
▪ High level of labour productivity

21
Q

opportunities belgische economie

A

Pick-up in structural reform momentum (cf. pension and labour market reforms) sustaining potential growth
▪ But further reforms are needed (e.g. reform of wage bargaining system, new tax shift to less growth-distortive taxes,…)
▪ Wage competitiveness has been improving
▪ Better coordination between education & labour demand
▪ Need to strengthen competition in the retail/services sector (in particular network industries: electricity and gas, telecom,…)

22
Q

weaknesses belgische economie

A

Still high fiscal burden, despite recent turn-around
▪ Lack of entrepreneurship and big global players
▪ Low employment rate among older and immigrant people
▪ Regional disparities/divisions slowing gov. efficiency/reaction
▪ Regional and functional mismatches on the labour market
▪ Exports still too little focused on non-European markets
▪ Traffic congestion (especially in Flanders & Brussels)
▪ Relatively low non-cost competitiveness (cf. WEF indicator)
▪ Innovations too little commercially-oriented

23
Q

threats belgische economie

A

Strongly vulnerable to international trade disruptions (like e.g. Brexit and trade war)
▪ High public debt resulting in a low capacity to absorb shocks
▪ Negative impact of ageing on potential growth
▪ Backlog in public investments
▪ Industry highly dependent on foreign multinational companies
▪ Structurally higher inflation than in the euro area
▪ Increasing household indebtedness and possible downward
correction on the property market
▪ Belgium’s complex regional divides

24
Q

Oplopende schuldenpositie bij de gezinnen

A

(Nog) niet excessief hoog, maar steeg voorbije jaren wel sterk. De
kredietkwaliteit (cf. aantal wanbetalingen) blijft alsnog goed, zelfs verbeterd
(maar: betalingsuitstel hypothecair krediet door covid-19 crisis)