According to the latest statistics, Belgian economic growth came in at 0.2% in the second quarter of 2024. This is in line with the NAI’s earlier flash estimate but lower than the 0.4% estimate in the June 2024 Business Cycle Monitor. This can partly be attributed to an asymmetric shock that affected vehicle manufacturing through a bankruptcy and production declines.

Household consumption growth was moderate in the second quarter. Consumer sentiment rebounded in the meantime, but the fundamentals remain rather weak for now. Overall, household consumption growth is expected to remain sluggish in the third quarter of 2024.

Business investment growth was boosted by exceptional transactions in the second quarter, but the underlying momentum was very weak and we expect business investment growth to remain close to zero in the current quarter. Residential investment should remain sluggish as well.

Net exports (excluding the exceptional sales of investment goods abroad) boosted activity growth in the second quarter. Trade growth is likely to remain sluggish in the near term, but a gradual improvement in Belgian competitiveness should support export growth in the near term. All in all, the underlying contribution of net exports to GDP growth should remain positive in the current quarter.

Government consumption is likely to moderate slightly in the current quarter, and government investment growth should continue to benefit from the electoral cycle, as well as the roll-out of large investment programmes.

The NBB’s BREL nowcasting model currently estimates growth in the third quarter at 0.3%, which is also the median of the one-indicator models’ predictions. The R2D2 model, on the other hand, sees growth at -0.2%.

All in all, a growth rate of 0.2% in the third quarter of 2024 currently appears to be the most plausible estimate. While private demand and manufacturing output are likely to remain quite weak, the gradual unwinding of the exceptional asymmetric shock on vehicle production should support growth. In the third quarter, the value added of vehicle manufacturing is indeed unlikely to decline to the same extent.