Country Economic Forecasts > Belgium

GDP expanded by 0.4% q/q in Q2, marking Belgiums fastest pace of economic expansion in more than four years. In line with our view, household spending remained a strong driver of growth, while net trade also provided support. That said, the slowdown in import growth was linked to a base effect following one-off investments abroad in Q1. This also explained the sharp decrease in investment over the quarter. Prospects for H2 2015 look fairly solid, with Belgian consumers enjoying the boost to real disposable incomes from low inflation and falling unemployment, while exporters feel the benefit from the weaker euro and improving economic climate in the Eurozone. Overall, GDP growth is seen at 1.3% this year slightly below that in the euro area as a whole and rising to 1.6% in 2016 as export growth picks up further. But structural weaknesses such as high debt, poor demographics and relatively high labour costs mean that growth is unlikely to accelerate much beyond this in the medium term in the absence of meaningful economic reforms.