Breaking News

Tweet TWEET

Belgian 2012 Growth Forecast Cut to 0.1% by Planning Bureau

Belgium’s planning bureau cut its forecast for 2012 economic growth as government austerity measures hurt consumer spending, complicating Prime Minister Elio Di Rupo’s task of meeting his deficit goal.

Growth in the Belgian economy shouldn’t exceed 0.1 percent this year, the Brussels-based agency said today in an e-mailed statement, compared with its September forecast of 1.6 percent.

The slower growth means Di Rupo’s government needs to find as much as 2.5 billion euros ($3.3 billion) in spending cuts or new revenue in order to meet its budget-deficit target of 2.8 percent of gross domestic product, L’Echo and De Tijd reported today. Belgium entered a recession last year, with the economy shrinking 0.2 percent in the fourth quarter and 0.1 percent in the third.

“In 2012, quarterly growth in the Belgian economy should remain very modest given the very gradual recovery of the European economy and fiscal consolidation measures decided by the federal government,” the planning bureau said. “Economic activity should stabilize in the first quarter, and then show weak export-led growth” over the rest of the year.

Belgian consumer confidence dropped to the lowest in two and a half years last month as consumers faced inflation accelerating to 3.7 percent boosted by higher gasoline prices and a record price of diesel.

To contact the reporter on this story: Andrew Clapham in Brussels at aclapham@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.