Belgium: Economy contracts for second consecutive quarter
March 7, 2012
In the fourth quarter, GDP fell a seasonally and calendar-adjusted 0.1% over the previous quarter, according to revised data published by the National Bank of Belgium on 7 March. The reading was slightly up from the 0.2% contraction posted in the 1 February flash estimate and follows an identical decline in the third quarter. Compared to the same period last year, GDP growth slowed down from 1.6% in the third quarter to 1.0% in the fourth. In the full year 2011, GDP expanded 1.9%. The quarterly drop showed that fixed investment contracted 0.5% over the previous quarter, following Q3's 0.6% decline. In contrast, total consumption improved compared to the third quarter, as private consumption swung from a 0.1% drop in Q3 to a 0.2% increase in Q4. Government spending increased 0.3% in Q4, half the pace recorded in the third quarter. The external sector improved somewhat, as imports declined at a sharper pace than exports. Exports of goods and services contracted 0.7% in Q4, slower than the 0.9% fall recorded in Q3. Imports fell 1.0% over Q3, a marked deterioration compared with the 0.2% drop recorded in the previous quarter. As a result, the external sector's net contribution to overall growth improved from minus 0.5 percentage points in the third quarter to plus 0.2 percentage points in the final quarter of 2011. The Federal Planning Bureau expects the economy to grow only 0.1% this year, a downward revision of its previous 1.6% estimate. Meanwhile, the National Bank of Belgium predicts that the economy will contract 0.1% this year.
Author: Ricardo Aceves, Senior Economist