GDP growth inches down in Q2

Economy loses momentum in Q2: According to a preliminary estimate, GDP growth moderated to 0.2% on a seasonally adjusted quarter-on-quarter basis in the second quarter, down from the 0.4% rise in the first quarter. On an annual basis, economic growth eased to 1.0% in Q2, down compared to the previous quarter's 1.1% and marking the joint-softest figure since Q1 2024.

Across-the-board deterioration in Q2: Preliminary results suggest that the moderation in sequential GDP growth was broad-based. Services sector activity decelerated in Q2, expanding 0.2%, down from Q1’s 0.4%. Construction growth also cooled to 0.2% from 0.9% in Q1. Meanwhile, industrial output contracted by 0.1% in Q2, partly reversing the 0.2% expansion seen in Q1.

GDP growth to be driven by consumption, weighed down by trade: Our panelists expect sequential GDP growth to remain underwhelming in the remainder of the year. Over 2025 as a whole, GDP growth is projected close to last year’s level, as a stronger expansion in private spending—boosted by lower inflation and interest rates—largely offsets weaker expansions in public spending and fixed investment. Meanwhile, 2025 will likely see a protracted downturn in exports: The new EU-U.S. trade agreement includes a 15% tariff on Belgium’s top export pharmaceuticals, of which 27% are shipped to the U.S. In addition, the country’s open economy remains vulnerable to a broader global slowdown.

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