Belgium: Economy grows faster than initially estimated
March 9, 2011
In the fourth quarter, GDP grew 0.5% over the previous quarter in seasonally and calendar adjusted terms, according to revised data published on 9 March. The initial estimate from 16 February had GDP growing 0.3%. The fourth quarter increase represented a slight acceleration compared to the 0.4% expansion in Q3. On an annual basis, GDP expanded 2.0% in the final quarter of 2010 (initially reported: +1.8% year-on-year), which maintained the pace observed in the third quarter. The faster growth rate observed in the fourth quarter was driven entirely by positive developments in domestic demand, while the net contribution from the external sector deteriorated compared to the previous quarter. Government consumption expanded 0.4% in the fourth quarter, twice the pace observed in the third quarter. Gross fixed investment accelerated at the fastest pace since the fourth quarter of 2007, growing 1.0% in Q4 (Q3: +0.4% qoq). Only private consumption moderated the rhythm, growing 0.3% in the fourth quarter (Q3: +0.4% qoq). Meanwhile, the contribution from the external sector deteriorated over the previous quarter, as exports dropped while imports posted a strong expansion. Exports of goods and services fell 0.2% quarter-on-quarter, which contrasted the 0.7% expansion witnessed in the third quarter. In contrast, imports grew 1.2% in Q4, contrasting the 0.3% drop observed in Q3. As a result, the net contribution from the external sector to overall economic growth fell from a 0.8 percentage-point addition in the third quarter to a 1.1 percentage point detraction in the final quarter of 2010. At the sector level, the fourth quarter acceleration reflected an improvement in agriculture and in services whereas the industrial sector decelerated. The Central Bank anticipates economic activity to grow 1.8% this year, while the Federal Planning Bureau expects the economy to expand 2.0%.
Author: Ricardo Aceves, Senior Economist