According to current statistics Belgian economic activity accelerated slightly to 0.4% in the third quarter of 2023, up from 0.3% in the second. This constitutes a slight downward revision from the earlier flash estimate but is still 0.2 pp higher than the September BCM estimate (which was based on statistics up to the second quarter that have meanwhile been revised up).

In the third quarter, GDP growth benefited from the moderate acceleration of private consumption and services. Household consumption growth is expected to edge up again in the fourth quarter of 2023, as consumer confidence is trending up and purchasing power growth has been solid.

Business investment growth in volume terms moderated somewhat but remained strong in the third quarter. This gradual moderation should continue in the fourth quarter but growth is expected to remain clearly positive. Residential investment shrank in the third quarter and is likely to decline further in the fourth quarter. Net exports have reduced activity growth in the third quarter and their negative contribution may even become slightly larger in the fourth quarter.

Government consumption returned to moderately positive growth in the third quarter and should maintain its current pace, while government investment is expected to continue its acceleration, boosted by the roll-out of investment plans and the usual electoral cycle.

The NBB’s BREL nowcasting model currently estimates growth in the fourth quarter at 0.26%, while the R2D2 model remains clearly more optimistic, predicting a growth rate of 0.51%.

All in all, we currently expect economic activity to expand by 0.3% in the fourth quarter of 2023. This is just above the BREL nowcast but below the median predictions of the one-indicator models and clearly below the R2D2 outcome. Positive risks stem from potentially stronger-than-expected expansion of domestic demand, while negative risks mostly relate to the external environment.