Q4 nowcast: continued growth despite a challenging environment
The Belgian economy is currently growing at a slow pace, as our latest nowcast shows. Growth remains positive, despite high inflation, rising interest rates and the need for fiscal consolidation.
Headwinds
Military conflicts on Europe’s external borders and in the Middle East are pushing up energy prices and weighing on our growth. AI is a promising technology, but it also raises many questions. Domestically, the challenges are just as significant: the government must urgently reduce the budget deficit, households are deeply pessimistic and the employment rate is still too low.
Weak but positive growth
Against this backdrop, we produced our first nowcast for the current quarter in partnership with Ghent University, following the recent annual revision of growth figures. As a result, real growth was revised slightly upwards for this year and last year, while forecasts for 2024 were revised downwards.
While household confidence is declining, the picture among businesses is more positive - with confidence at its highest since January. Only the retail sector has seen a slight downturn, mainly due to weaker employment prospects.
Our own banking index, based on aggregated and anonymised transactions at sector level, shows a positive trend. Both revenues and costs have increased in construction and industry over recent months. The trend is more moderate among service providers.
Lower risk of recession
Overall, the models point to quarterly growth of 0.25%. The good news: unlike in previous months, none of the models projects negative growth. The risk of recession has therefore fallen further in recent weeks.
For 2026, we now forecast growth of 0.8%, rising to 1.1% next year.
