Belgium: GDP growth ticks up in Q2
August 31, 2018
Comprehensive data released by the Bank of Belgium (NBB) on 31 August revealed that GDP growth in the second quarter came in at a modest 0.4% in quarterly terms and on a seasonally- and working day-adjusted basis, a tad above the preliminary estimate of 0.3% and the 0.3% expansion logged in the first quarter. The second-quarter pick-up was due to stronger contributions from both domestic and external demand. On an annual basis, growth eased to 1.4% in Q2 (Q1: +1.5% year-on-year).
Private consumption lost some steam in Q2, rising a marginal 0.1% from the previous quarter (Q1: +0.3% quarter-on-quarter, seasonally adjusted). Weakness in household spending came amid a deterioration in consumer confidence and despite the strong labor market, which saw the unemployment rate remain at its lowest level in nearly two decades in Q2. On the other hand, capital expenditures accelerated in Q2, growing a solid 0.9% quarter-on-quarter (Q1: +0.4% qoq, s.a.) as buoyant business and public investment more than offset a marked deceleration in residential investment. Public spending also contributed to the headline figure, rebounding strongly in the second quarter (Q2: +0.4 qoq, s.a.; Q1: -0.2% qoq, s.a.).
Meanwhile, in the external sector, growth in exports and imports gained some traction amid still-heightened tensions in the global trade landscape. Exports of goods and services climbed 0.7% from a quarter earlier (Q1: +0.1% qoq, s.a.) while imports rebounded, increasing 0.7% quarter-on-quarter (Q1: -0.2% qoq, s.a.). All told, the external sector contributed 0.3 percentage points to overall growth in the quarter, slightly higher than the 0.2 percentage points contribution in Q1.
Author: Javier Colato, Economist