War in Ukraine: What are the economic implications for Belgium and Europe?

Bruno Wattenbergh, RTLInfo’s economics specialist, answered Olivier Schoonejans’ question about the direct economic consequences of Russia’s invasion of Ukraine.

Before the impact on energy prices, Bruno Wattenberg emphasizes the impact on the stock market. “”they’east Withdrawal even if expected from a few weeks ago“, He explains. “”This willeast It’s never good news to see investors withdraw.“”

Next is the issue of energy. “We have reached a price not seen since 2014 At oil and gas levels, we still rose 33%“, He says. “”automatically, It affects the electricity bill.“”

Wheat prices go up, but not that’s all

Another problem is that Ukraine is a very large grain supplier. It has a population of 45 million and can supply 600 million. “”What’s happening now is already pushing up wheat prices, which are also at their highestsNever achieved so far“, Bruno Wattenberg continues.. “”And that, we go Pay it. not only Wheat corn Also, barley, rye, Corn and even honey.“According to experts, this will raise the price of Belgian products. Consumers are affected, which encourages inflation. “”Prices are rising and will put pressure on economic growth. It’s a very dangerous virtuous cycle for Belgium.“”

And in the medium term?

In this situation, these reactions are Classic.cornWhat could happen in the medium term How to pass? What are the economic risks of Europe linked to?Ukraine again, Russia? “”The first problem is the Russian outlet“, Bruno Wattenberg says. “”We still have an economy to export to Russia. then 2014 and Living The incident with Russia, the Ukrainian economy collapsed. It is also our exit. For example, the port of Odessa was bombarded when it was at the exit. To The sea of ​​all these products.“”

From there have Sanctions against Russia have a double effect. MeWhen The first effect is that these sanctions put pressure on gas producers. “Norway to replace Russia is already 100%“, The economist explains. “”Electricity and energy prices remain high.“”

Another effect is that the sanctions imposed weigh heavily on trade with trade. Russia Also about Europe and the world economy. “”They will put us at risk of a spiral of economic decline, which we didn’t need when we were out of crisis COVID..“”

Investors hate uncertainty

Europe wanted a rebound from Four% At the level of Growth The European Commission has already declared that these figures will not be reached. “”We remain uncertain“, Bruno Wattenberg says. “”Investors hate uncertainty. This will put pressure on economic growth and thus employment.“”

Belgium’s best customer Russia or Ukraine?

During the first 11 months of 2021, Belgium exported € 4.1 billion to Russia, mainly in chemicals, machinery and plastics. Russia is Belgium’s 17th export market.

During this period, € 7 billion of goods were exported from Russia to Belgium. These were mainly minerals and metals.

Trade is limited in Ukraine. In the first 11 months of 2021, Belgium’s exports were € 648 million and imports were € 628 million. Ukraine is Belgium’s 51st trading partner and 46th supplier.

Belgium mainly exports chemical products, machinery and transportation equipment to Ukraine. Imports are made up of agricultural products, metals and wood.