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Belgium GDP Q2 2023

Belgium: GDP growth ebbs in the second quarter

GDP growth eased to 0.2% on a seasonally adjusted quarter-on-quarter basis in the second quarter according to a second estimate, in line with July’s flash estimate and down from 0.4% growth in the previous quarter.

The downturn was driven by weakening private consumption, fixed investment and exports. Household spending growth fell to 0.5% in Q2 (Q1: +0.6% s.a. qoq), marking the weakest reading since Q1 2022. Public spending contracted at a more moderate rate of 0.6% in Q2 (Q1: -0.7% s.a. qoq). Fixed investment growth slowed to 1.2% in Q2, from the 1.9% growth recorded in the prior quarter. All in all, domestic demand growth excluding inventories came in at 0.4%, down from 0.7% in Q1. Inventory reductions subtracted from GDP in the quarter.

Exports of goods and services declined at a sharper rate of 1.0% in Q2 (Q1: -0.8% s.a. qoq). In addition, imports of goods and services slid at a more pronounced rate of 0.8% in Q2 (Q1: -0.7% s.a. qoq), marking the worst reading since Q2 2020. Net exports subtracted 0.2% from the GDP reading, after the 0.1% subtraction of the previous quarter.

On the sectoral side, activity growth was mainly driven by the service sector. Activity in the construction sector expanded slightly, while the industrial sector contracted for the fifth consecutive quarter.

On an annual basis, economic growth moderated to 0.9% in Q2, from the previous quarter’s 1.3% increase. Q2’s reading marked the softest growth since Q1 2021.

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