Belgium’s expansion slowed in the first quarter as harsh weather hampered the economy’s recovery from the worst slump in at least six decades.
Gross domestic product in Belgium, the first euro-zone nation to report first-quarter GDP data, expanded 0.1 percent from the fourth quarter, when it gained 0.3 percent, the National Bank of Belgium in Brussels said today.
European governments are trying to bolster the recovery while seeking ways to tackle budget deficits, which swelled last year as policy makers rolled out measures to fight the recession. At the same time, Greece’s budget crisis is rippling through the region, hurting the euro after Germany’s reluctance to approve emergency funds sparked contagion concerns.
The Belgian data could be “an indication that GDP growth may be lackluster throughout the euro zone in the first quarter,” said Dominique Barbet, an economist at BNP Paribas in Paris. While “cold weather and heavy snow distorted the economic activity in January,” he said “business surveys suggest a much stronger second quarter.”
Business sentiment in Belgium, the sixth-largest economy among the 16 nations using the euro, improved more than economists forecast this month, the central bank said last week. Business confidence in Germany, Europe’s biggest economy and one of Belgium’s largest trading partners, jumped to the highest in two years.
Belgium also faces the uncertainty of possible early elections after Prime Minister Yves Leterme’s coalition collapsed this month amid a deadlock over a disputed voting district. Belgium, which takes over the European Union’s six-month presidency on July 1, has gone through four governments since elections in 2007 produced a political stalemate.
“The key question in the near future is how the political crisis and the possible elections will affect the economy,” said Philippe Ledent, an economist at ING Groep NV in Brussels. “Domestic demand looks still sluggish and GDP growth for the year as a whole should hardly reach 1.4 percent,” as projected by the government’s Federal Planning Bureau forecast last month.
Exmar NV, the Antwerp-based operator of the world’s largest fleet of midsize gas tankers, said today that first-quarter earnings fell about 39 percent. Tessenderlo Chemie NV, the world’s third-largest producer of animal-feed phosphates, said its quarterly loss narrowed to 5.1 million euros ($6.8 million) from 6.2 million euros a year earlier.
From the year-earlier period, Belgium’s first-quarter GDP increased 1 percent, after a 0.8 percent drop in the previous quarter. That was the first annual increase in output since the third quarter of 2008.