Belgium Forecasts 0.4% Economic Growth in Second Quarter

Brussels (Brussels Mroning) – Belgium’s economy is projected to grow by 0.4% in Q2 2024, with the National Bank expecting increased activity. Challenges persist, but recovery in employment and export growth are anticipated.

The Belgian economy is expected to increase by at least 0.4% in the second quarter of 2024, with the National Bank of Belgium (NBB) conveying that economic activity has grown since the first three months of the year. While different forecasting standards used by the NBB predict economic growth of between 0.3% and 0.5% in the second quarter, the bank believes the forecast that GDP (gross domestic product) will increase by 0.4% to be the “most plausible estimate”.

Can Belgium Overcome Economic Challenges with a 0.4% Growth Forecast?

The NBB added that if a comeback in the manufacturing sector guides businesses to buy stock at a faster rate, growth could reach 0.4%. Latest figures indicate that Belgian economic activity rose 0.3% in the first quarter of 2024. During the first three months of the year, household consumption stalled, and there was a deceleration in job creation and a deceleration in purchasing power.

The NBB stated that household spending is expected to remain average in the second quarter of the year, but beyond the near term, the economy could maintain again as employment recovers and a fall in inflation fuels real income growth.

How Will Belgium’s Economy Fare with a 0.4% Growth Projection?

Net export activity rose in the first quarter, and the NBB stated an expansion of world trade and gradual progress to Belgium’s competitiveness should help keep further export growth in the near term. Business investment increased “markedly” in the first quarter, mainly due to exceptional transactions, but the NBB stated that cost-cutting in many firms is impacting investment spending. 

What Drives the National Bank’s 0.4% Growth Estimate for Belgium?

The central bank stated that the underlying firm investment shift this quarter will be positive but moderate. The bank stated that a rise in residential investment in the foremost quarter was a “welcome surprise”. However, evolution in this sector for the second quarter is anticipated to be muted at best and could turn negative. Government consumption should decelerate somewhat in the second quarter, although government investment maturing should continue to be inspired by the roll-out of specific investment schedules and the electoral cycle.

Belgium has a free-enterprise economy, with the bulk of the gross domestic product (GDP) rendered by the service sector. The Belgian economy also is inseparably tied to that of Europe. The country has been a constituent of a variety of supranational organizations, including the Belgium-Luxembourg Economic Union (BLEU), the Benelux Economic Union, and the EU. 

The first significant step Belgium took in internationalizing its economy happened when it became an alliance member of the European Coal and Steel Community in 1952. On January 1, 1999, Belgium also evolved as a charter member of the European Monetary Union, paving the path for the introduction of the euro, which evolved into the country’s sole currency in 2002, replacing the Belgian franc.