According to the revised statistics Belgian economic growth declined marginally to 0.3% in the fourth quarter of 2023. This expansion of economic activity is exactly in line with the estimate in our December BCM but slightly below the NAI’s earlier flash estimate of 0.4%.

In the fourth quarter, GDP growth benefited once more from robust private consumption growth. Household consumption growth should only moderate slightly in the first quarter of this year. Consumer confidence is still up compared to the fourth quarter but purchasing power growth is losing some traction.

Fourth-quarter business investment in volume terms fell markedly, mostly due to unanticipated, exceptional factors. Fundamentals remain quite sound, however, and firm investment is expected to return to moderately positive (underlying) growth in the current quarter. Residential investment shrank in the fourth quarter and is likely to decline further in the current quarter.

The bottoming out of cost-competitiveness and renewed growth in world trade should support underlying export growth, which should lead to an improvement of net exports in the current quarter already.

Government consumption growth was positive in the fourth quarter and should continue to grow at a moderate pace. Similarly, government investment growth should remain clearly positive, boosted by the roll-out of investment plans and the electoral cycle.

The NBB’s BREL nowcasting models currently estimate growth in the first quarter at 0.3 to 0.4%, while the R2D2 model is less optimistic, predicting a growth rate of around 0.1%.

All in all, we currently expect economic activity to expand by 0.4% in the first quarter of 2024. This is at the high end of the range of model nowcasts but below the median predictions of the one-indicator models. Positive risks are deemed limited, while negative risks mostly relate to possibly lower-than-anticipated growth in firm investment and trade.