Belgium GDP Q1 2021


Belgium: Economy rebounds in the first quarter

May 31, 2021

A second estimate confirmed that GDP rebounded on a seasonally-adjusted quarter-on-quarter basis in the first quarter, increasing 1.0% (previously reported: +0.6% s.a. qoq), in contrast with the 0.1% contraction tallied in the fourth quarter of last year.

Household spending increased 0.9% in the first quarter, which contrasted the fourth quarter's 6.4% contraction. Moreover, public consumption growth picked up to 1.3% in Q1 (Q4 2020: +0.3% s.a. qoq). Meanwhile, fixed investment growth fell to 2.5% in Q1, marking the worst reading since Q2 2020 (Q4 2020: +3.7% s.a. qoq), as business investment lost steam.

Exports of goods and services contracted 0.5% in Q1 (Q4 2020: +3.7% s.a. qoq), as trading partners across Europe also faced higher Covid-19 infection rates and tightened restrictions. In addition, imports of goods and services deteriorated, contracting 1.3% in Q1 (Q4 2020: +1.9% s.a. qoq).

On an annual basis, GDP fell at a softer pace of 0.6% in Q1 (previously reported: -1.0% year-on-year) following the previous quarter's 4.9% contraction, thanks to a favorable base effect. Q1's reading marked the strongest since Q4 2019.

Looking at Q2, the lockdown that carried over from the previous quarter will have dragged on activity at the outset of the period. However, the easing of restrictions from mid-April should have led to a pickup in momentum later in the quarter. In addition, renewed optimism among consumers and businesses bodes well for demand, while the possibility that pent-up savings will be unleashed poses an upside risk to the recovery.

On the outlook beyond Q2, Daniela Ordonez, chief French economist at Oxford Economics, commented:

“The health situation is continuing to improve, with the number of infections declining and the vaccination rollout gathering pace. This means the initially ambitious reopening calendar is likely to be maintained, with almost all restrictions that have a clear economic impact planned to be lifted by the end of June, which should lead to record quarterly growth in Q3.”

On the same note, analysts at the EIU added:

“As the virus is likely to be gradually brought under control during 2021, owing to the vaccine rollout, economic activity will start recovering. Confidence—and hence demand—should pick up in the second half of the year. […] We expect private consumption and investment to boost the recovery later in the year.”

FocusEconomics Consensus Forecast panelists forecast GDP to increase 4.2% in 2021, which is up 0.2 percentage points from last month’s projection. For 2022, the panel sees economic growth of 3.4%.

Author:, Junior Economist

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Belgium GDP Chart

Belgium GDP Q1  2021 2

Note: Quarter-on-quarter changes of seasonally-adjusted GDP in %.
Source: National Bank of Belgium (NBB) and FocusEconomics Consensus Forecast.

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