Country Economic Forecasts > Belgium

The first estimate of Belgian GDP for Q3 shows a quarterly rise of 0.2%, down from strong 0.5% expansion in Q2. Given that consumer confidence faded a little at the beginning of the quarter, we expect the result to be due to a slowdown in consumer spending. Looking ahead, continuing slack in the labour market will cause lower earnings growth, which together with rising inflation will dampen private consumption. Meanwhile, investment should add to GDP as firms' margins and capacity utilisation rates continue to recover. At the same time, net trade should contribute positively to GDP growth in 2016, with the lower oil prices curbing imports and the weaker euro continuing to benefit exporters. Overall, we see GDP expanding by 1.3% this year and 1.4% in 2016 still below the Eurozone average before rising to 1.6% a year over the medium term.The main economic constraints weighing on the Belgian economy remain the public debt overhang as well as the numerous labour market rigidities. At the same time, negative external shocks, which could come from a slowdown in emerging markets or a possible Greek exit from the euro could also delay the recovery.