Belgium Economic Forecast

Belgium Economic Outlook

November 20, 2018

Preliminary GDP data revealed the economy gained traction in Q3, with quarterly growth slightly above the modest showing in the first half of the year. Although a full breakdown is yet to be released, the third-quarter expansion was seemingly powered by the industrial sector, with output rebounding strongly on average in July–August on the back of buoyant manufacturing activity, primarily of chemicals and electronics. On the expenditure side, stronger merchandise exports growth in the same two-month period suggests external demand made again an important contribution to overall economic activity. That said, mild retail sales growth in July–August alongside slightly higher unemployment and consumers turning more pessimistic on average in Q3 point to subdued private consumption in the quarter, likely weighing on overall growth. Meanwhile, in October, consumer confidence strengthened slightly while business sentiment dipped, painting a mixed picture at the outset of Q4.

Belgium Economic Growth

The economy is expected to maintain a modest pace of expansion next year, propped up by solid domestic demand. A tight labor market and healthy wage gains should underpin a pick-up in household spending. This, coupled with strong investment activity, aided by favorable financing conditions, will remain the main engines of growth ahead. Key downside risks to the outlook are largely external given Belgium’s highly open economy, with potential impacts arising from a slowdown in demand in the country’s main trading partners or an escalation of global trade conflicts. FocusEconomics analysts project growth of 1.5% in 2019, which is down 0.1 percentage points last month’s forecast, and 1.5% again in 2020.

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Belgium Facts

Bond Yield0.750.15 %Dec 12
Exchange Rate1.140.65 %Dec 12
Stock Market3,401-0.23 %Dec 12

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