• Conflict over water, coal

    SA's leaders have upped their support of the water-intensive coal industry, says Keith Schneider.

  • Cost of doing business

    The world can't afford the $4.7trn a year in environmental costs of business, says Mandi Smallhorne.

  • Voter paralysis

    With so much tilting voters against change, democratic reason is the loser, says Solly Moeng.

All data is delayed
Loading...
See More

Belgium first in eurozone to enter recession

Feb 01 2012 18:01
Reuters
Brussels - Belgium became the first eurozone member formally to fall into recession in the second half of last year, data showed on Wednesday, paving the way for what is expected to be a tough contraction for the bloc as a whole in 2012.

Gross domestic product (GDP) in the bloc’s sixth largest economy shrank by 0.2 percent in the fourth quarter, following a quarterly contraction of 0.1 percent in the July-Sept period.

Two consecutive quarters of contraction is generally accepted by economists as the minimum for an economy to be considered in a recession.

Belgium is often cited as a harbinger of things to come in Europe and many countries in the region are already sliding towards recession, hit by the eurozone debt crisis and a wave of austerity required to cure it.

Final quarter figures for the euro zone, which grew by 0.2 percent in the third quarter, will be published on Feb. 15.

Germany, France, Italy and the Netherlands are also due to release their GDP estimates on that day. Spain said on Monday its economy had shrunk in the fourth quarter.

A Reuters poll earlier predicted that the euro zone as a whole will contract 0.3 percent in the coming year.
Economists said on Wednesday it had come as no surprise to see Belgium’s recession confirmed. Indeed the 0.2 percent contraction was slightly better than some had expected.

Few also expect any improvement in the first three months of 2012, notably after the new Belgian government imposed austerity measures in December designed to save €11.3 bn.

Private households in particular are downbeat, the consumer sentiment index falling to a two-and-a-half year low in January.

“In order to sell the measures our politicians have had to talk a different language.... They have to say the situation is serious. Saying this makes people feel less comfortable,” said Etienne De Callatay, economist at Bank Degroof.

Economists broadly expected growth in the second quarter, the rate dependent on the health of trade partners - Belgium is among the most open economies in the world.

“There could be some upward potential coming from outside,” said Steven Vanneste of BNP Paribas Fortis. “Financial tensions are easing so I think the worst of the economic crisis should be behind us. We see stabilisation right now but its still in a very fragile state.”

Year-on-year on Belgium grew 0.9 percent in the fourth quarter for a 1.9 percent total growth in 2011.

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about:

THE DEBT ISSUE

Debt is one of the biggest financial issues facing South Africans today. Find out how you can avoid and manage your debt with Fin24 and Debt Rescue.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The upcoming petrol price hike is:

Previous results · Suggest a vote

Loading...