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Economy in Brief

Belgian National Bank Index Pushes Higher
by Robert Brusca  February 22, 2011

The Belgian Bank Index is still pushing higher in February. It has in this recovery cycle crossed over into positive territory for the first time after flirting with the possibility in earlier months.

The BNB index stands in the 82nd percentile of its ranked queue of values since 1990. This positioning means that the index has been stronger than its current value only about 18% of the time.

The prices portion of the survey indicates elevated prices over the last 12-months as they were assessed as in their 92nd queue percentile and, while they are still quite high in their 81st percentile, over the next 12-months, expectations are not for inflation to accelerate, at least on this measure.

The Belgian index puts unemployment in the 14th percentile of its queue which is a low reading, implying little fear of unemployment rising. This is interesting for a country of middle size in the Zone and one that has struggled to form a government.

The financial situation is appraised as ‘constructive’ on the current situation with a reading above the 50th percentile at the 66th percentile and with expectations for the next 12-months in the 63rd percentile; both of those surpass the sub-par reading of the 41st percentile over the last 12-months. So financial progress is in gear and is still a work in progress.

On balance the Belgian index is good news. As the accompanying chart shows the index tends to be a more volatile that the EU indices but it does tend to track them over the various cycles. Thus the increase in the Belgian index is pointing the way higher for the EMU indices in February. These indices are yet to be released and it’s good to have a reason to be positive as we await their release.

Belgian National Bank Consumer Survey
  Monthly readings 3Mo Ago 6Mo Ago 12Mo Ago % of Queue
  Feb-11 Jan-11 Dec-10   Since 1990
Consumer Confidence 1 -3 -2 0 -4 -15 82.5%
Economic Situation
Next 12-Mos 4 -3 3 8 7 -1 88.4%
Last 12-Mos -10 -21 -17 -12 -15 -38 83.3%
Price Trends
Next 12-Mos 31 28 23 18 21 3 81.7%
Last 12-Mos 58 55 52 55 46 25 92.0%
Unemployment Forecast 8 15 16 17 27 64 14.7%
Major Household Purchases
Next 12-Mos -19 -20 -20 -20 -16 -26 25.5%
Favorable to buy at present? 10 8 9 15 8 3 73.3%
Financial Situation of HH
Next 12-Mos 3 0 0 2 1 0 63.7%
Last 12-Mos -8 -10 -7 -7 -12 -12 41.0%
Current situation appraisal 20 18 19 21 17 19 66.1%
Household Savings
Next 12-Mos 6 6 6 6 3 5 25.5%
Favorable to save at present? -24 -26 -25 -27 -20 -28 #N/A
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