Belgium: Economy loses momentum in Q2
July 29, 2011
In the second quarter, GDP grew 0.7% over the previous quarter in seasonally and calendar adjusted terms, according to a preliminary flash estimate released by the National Bank of Belgium (NBB) on 29 July. The quarterly expansion was below the revised 1.0% increase observed in the first quarter (initially reported: +1.1%), which had marked the strongest increase in over a year. Compared to the same quarter last year, GDP expanded 2.5% in the second quarter, below the 3.0% increase observed in the first. The Bank will publish detailed and more complete data on 30 September. The recovery process, however, is likely to continue to lose steam in the coming months, as both business and consumer confidence are weakening. Consumer confidence inched down from minus 3 points in June to minus 4 points in July, which represented the lowest confidence level in ten months. The monthly drop reflected consumers' increasing pessimism about the general economic situation for the next 12 months as well as worsening expectations regarding the financial situation in the year ahead. Business confidence followed suit, falling from minus 1.1 points in June to minus 2.5 points in July, which marked the lowest level since October 2010. The deterioration in business confidence reflected weaker prospects in the manufacturing and constructions sectors. The Central Bank anticipates that the economy will grow 2.6% this year, before slowing to 2.2% in 2012.
Author: Ricardo Aceves, Senior Economist