Things seem to be lining up for Belgium: business confidence is up, the economy is growing this year and for more growth is expected in 2010. But the country’s ETF still faces challenges in the coming year.
Belgium’s economy grew by 0.5 % in the third quarter of 2009, in line with a quick estimate released in October. This provided enough optimism to leave the previous forecast of 1% growth in 2010 in place. Interactive Investor says that the Belgium Central Bank raised its forecasts for economic growth in this year and the next.
Belgium business confidence hit a 15-month high in December, even as the manufacturing sector fell. According to Reuters, the decline in manufacturing sentiment was not a concern, given its strong uptrend in the past couple of months, suggesting a promising recovery into the start of next year, so say analysts.
The European Central Bank is therefore in no need to begin a tightening cycle, as the inflationary pressures are not imminent. iMarket News reports that the ECB held its official refinancing rate at 1%, but said it would start to withdraw some of the cheap emergency funding operations it had implemented to boost liquidity in the banking sector. The bank stressed that this was not to be taken as a rate hike signal.
- iShares MSCI Belgium Index (NYSEArca: EWK): up 52% year-to-date