Haver Analytics
Haver Analytics
| May 22 2023

Belgian Consumer Confidence Sinks

  • The upshot for the Belgian survey is that most conditions are considered to be a subpar (below a 50% standing), however, there's rather striking and surprising optimism on inflation even though Belgium is a country in the European Monetary Union and inflation in the union is high as the ECB has been slow to raise rates and still has work to do with interest rates well below the current inflation rate. Belgians don't seem to be too concerned about those factors. There is concern about the economic situation. The current assessment is that it is below par as unemployment concerns are beginning to creep higher. The survey overall is comparatively down beat with the exception of the inflation light expectation response.

Confidence in the Belgian National Bank consumer survey slipped to a - 9 reading in May from -6 in April. The May reading has its standing in the 41st percentile of its historic queue of data, leaving it below its median which occurs at a ranking of 50%.

The economic situation for the next 12-months slipped to -20 in May from -15; it has a standing in its 22nd percentile. The rating over the last 12 months for the economic situation as assessed in May was -40 which was a slight improvement from -43 in April but it still had a very low percentile ranking, at its 27.6th percentile.

Price trends over the next 12-months slipped to a + 1 reading in May from a + 4 reading in April. The queue percentile standing for this is extremely low at the 5.5 percentile, that's quite encouraging. It is a sharply different result from the assessment over the last 12-months; that reading of 85 slipped slightly from 86 in April and logged a 97.9 percentile standing in May – past inflation was horrific. So Belgium was coming off of a 12 month period where inflation expectations were extremely high and then this current period there's quite a bit of optimism with a low 5 percentile outlook for the 12 months ahead.

The unemployment forecast has risen this month to 18 from 14, however, it's still below the level of 19 that it had in March, just two-months ago. The queue percentile standing is 37.6 percent, still well below its historic median (at a rank of 50%) but indicating some significant risk of unemployment and on the rise compared to April.

Participants were asked about household purchases planned in the next 12 months; the ratings slipped to -22 from -18 although the -22 reading in May is identical to the -22 reading in March of this year. However, the standing is very weak at a 12.4% mark. The survey question “Is it favorable to buy at present” showed some improvement at -29 in May, up from -35 in April. However, it's still a very weak reading with an 8.4 percentile standing. This response has been weaker less than 10% of the time.

The financial situation of households over the next 12-months showed very slight slippage to -3 in May from -2 in April and is better than the -4 reading from March. The key percentile standing has the 25th percentile standing which is right at the boundary of the lower quartile and an obviously weak standing. The financial situation of households for the previous 12-months had been pretty steady at a -15 ranking possessing a lower 5.8 percentile standing.

Households appraisal of the current situation ticked down slightly in May to +18 from +19 in April. That's just a tick better than the +17 response from March and it has a 40.8 percentile standing in its historic queue of data. That standing is 10-percentile points below its median but still better than many other of the rankings in the table and comparable to the consumer confidence standing overall. The current situation is assessed as sub-par but does not have a terrible ranking.

Household savings over the next 12-months score +2, down from +6 in April and have a 30.3-percentile standing. When households are asked if it is a favorable time to save at present, the response has a -33-percentile net diffusion reading, weaker than the -32 in April but better than to March’s -34 reading; it's a ranking in May is a 62nd percentile standing, above its historic median. Improvement in the ‘good time to save’ metric is not always a good sign.

  • Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media.   Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

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