Belgium: Economy falls in recession in fourth quarter
February 1, 2012
In the fourth quarter, GDP fell a seasonally and calendar-adjusted 0.2% over the previous quarter, according to a preliminary flash estimate released by the National Bank of Belgium on 1 February. The quarterly deterioration followed the 0.1% contraction recorded in the third quarter, but was slightly better than analysts' prediction of a 0.3% decline. Thus, the Belgian economy is now in a technical recession. Detailed and more complete data will be published on 7 March. Compared to the same period the year before, GDP increased 0.9% in the final three-month period, which represents a notable deceleration compared to the 1.6% growth rate observed in the third quarter. Based on quarterly figures, the Belgian economy grew 1.9% in the full year 2011, slightly weaker than the 2.3% expansion tallied in 2010 and in line with last month's Consensus Forecast. In the wake of the ongoing debt crisis in the Eurozone and the government's decision to impose austerity measures in order to meet its budget-deficit target of 2.8% of GDP this year, the Federal Planning Bureau expects economic activity 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