Belgium: Economy hassles to recover from Russia-Ukraine war consequences, says officials

Europe: Since the day Russia has called for full-scale invasion of Ukraine, Belgium has been suffering from the economic impact caused by the military operation. The impact has affected several key areas in the economy, which are still hassling to recover from the global shockwaves being sent from the war of its southern neighbor.

The new impact of the assessment came as part of an updated document of the purchasing Power and Competitiveness Expert Group of the National Bank of Belgium, which released its impact assessment on June 3.

The Turbulent energy market, high inflation, market volatility, weakened public finances, and reduced profits still trouble the Belgian economy. They are all partially linked to Europe’s solidarity with Ukraine and international sanctions against Russia.

The market volatility and global trade have been both recovered since the beginning of the invasion, but the energy prices and rapidly escalating inflation have not. Moreover, more than ever, ordinary consumers are feeling the burden of the war in their household bills, at the pump, and during their weekly supermarket shop.

Along with this, the bank analysed financial indicators 100 days after the start of the war in Ukraine in order to see how the economy had reached to the most significant armed conflict in Europe since World War Two.

All over Europe, the increase in the price of natural gas has been felt by economies across the European Union (EU). Decreasing reliance on Russian gas and diversification through the EU’s Repower EU plan has led to a surge in the global price of gas. On the Dutch

TTF futures market prices over tripled between February 16 and March 7, reaching highs of more than €227 per megawatt-hour.

In Belgium, these huge increases in the price of wholesale gas were reflected two-fold in consumer bills, as per the experts of the National Bank.

Furthermore, in the reports, it has been mentioned that “With the gradual phasing out of fixed-price retail contracts, residential and small businesses have to bear rising natural gas prices despite the measures taken to reduce taxes and levies.”

 

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