The Belgian economy is set to grow by at least 0.4% in the second quarter of 2024, with the National Bank of Belgium (NBB) reporting that economic activity has picked up since the first three months of the year.
While different forecasting models used by the NBB predict economic growth of between 0.3% and 0.5% in the second quarter, the bank deems the forecast that GDP (gross domestic product) will grow by 0.4% to be the "most plausible estimate".
The NBB added that if a recovery in the manufacturing sector leads businesses to buy stock at a faster rate, growth could surpass 0.4%.
Latest figures show that Belgian economic activity grew 0.3% in the first quarter of 2024. During the first three months of the year, household consumption slowed, there was a slowdown in job creation and a deceleration in purchasing power.
The NBB said that household spending is expected to remain moderate in the second quarter of the year, but beyond the near term the economy could strengthen again as employment recovers and a fall in inflation fuels real income growth.
Net exports activity increased in the first quarter, and the NBB said an expansion of world trade and gradual improvements to Belgium's competitiveness should help to support further export growth in the near term.
Business investment grew "markedly" in the first quarter, largely due to exceptional transactions, but the NBB said that cost cutting in many firms is affecting investment spending. The central bank said that underlying firm investment growth this quarter will be positive but moderate.
The bank said that a rise in residential investment in the first quarter was a "welcome surprise". However, growth in this sector for the second quarter is expected to be muted at best, and could turn negative.
Government consumption should decelerate somewhat in the second quarter, although government investment growth should continue to be boosted by the roll-out of specific investment programmes and the electoral cycle.
