Belgium Economy Facts
Belgium is a small and open economy with a diverse industry, extensive foreign trade and a large service sector. The central location in Europe and many international bodies and companies provide benefits. But the country is divided, between the richer Flanders and Wallonia, who had difficulty recovering after the downturn in the coal and steel industry.
The Flanders in the north is prosperous with modern manufacturing industry and Europe’s second largest port, Antwerp. Wallonia in the south has seen previously heavy industrial branches like coal and steel turn into crisis industries, and the region is dependent on financial support from both the Treasury and the EU. As a whole, Belgium lives on its extensive service sector, which accounts for just over three-quarters of GDP, as well as a diverse industry.
- Countryaah.com: Major imports by Belgium, covering a full list of top products imported by the country and trade value for each product category.
Thanks to its location and good transport potential, the Belgian economy benefits greatly from the EU’s internal market. The country is the seat of many international and multinational companies and has attracted extensive foreign investment which has mainly benefited Brussels and the already wealthy Flanders.
At the same time, the domestic business sector is characterized by a high proportion of small and medium-sized enterprises, not least in comparison with the rest of Europe.
Belgium had relatively strong economic growth during the 1990s, but struggled with high unemployment, a government budget deficit and a government debt, which in the middle of the decade amounted to a full 135 percent of GDP. Through the deficit policy, the deficit and government debt gradually decreased. Among other things, extensive privatizations of state property were carried out, wage developments were held back and unemployment benefits were lowered. Belgium qualified to participate in the EU monetary union EMU from its inception in 1999.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including BEL which represents the country of Belgium. Check findjobdescriptions to learn more about Belgium.
Work on reducing taxes for both companies and individuals has continued, while further control over taxes has been transferred to the regions.
The budget was in balance for the first time in 50 years in 2000 and went with a small surplus for a few years until it again showed a smaller deficit in 2007. At the same time, central government debt was down to around 87 percent of GDP. It was still a high figure, which exceeded the EU’s rule of max 60 percent, but the rate of decline impressed. However, the financial crisis that broke out in the world in 2008 squeezed the central government debt again and it has been above 100 percent since 2011.
The financial crisis, like in many other places, led to negative growth in 2009. The financial sector was affected, as was the important foreign trade. Nevertheless, Belgium fared better than many other euro countries. The state acted quickly to prevent collapses when financial companies and banks such as Fortis, Dexia, KBC and Ethias had acute problems. State aid to the labor market contributed to unemployment not soaring and domestic demand maintained at a relatively good level. The recovery was good in 2010 when the economy grew despite the tough government crisis in the country (see Modern history). Thereafter, growth slowed in and in 2012-2013 it was close to zero, and then only modest increase. The eurozone debt crisis contributed to the inertia.
FACTS – FINANCE
GDP per person
US $ 46,556 (2018)
US $ 531,767 Million (2018)
1.4 percent (2018)
Agriculture’s share of GDP
0.7 percent (2018)
Manufacturing industry’s share of GDP
12.8 percent (2017)
The service sector’s share of GDP
68.8 percent (2018)
1.5 percent (2019)
Government debt’s share of GDP
102.0 percent (2018)
US $ 342,516 M (2018)
US $ 341,776 M (2018)
– US $ 6,819 million (2018)
Commodity trade’s share of GDP
172 percent (2018)
Main export goods
vehicles and machinery, chemical products, food, diamonds
Largest trading partner
Germany, France, Netherlands, UK, USA
- 1 euro = 100 cents
New government with the same parties
Former Speaker Herman Van Rompuy has formed a new government with the five parties that formed since the formation of the government in March 2008. The new Prime Minister, like Yves Leterme, belongs to the Flemish CD&V, but is also popular among the French-speaking part of the population.
The government falls because of the Fortis business
Prime Minister Yves Leterme decides to resign after a court ruling on the shareholders’ line and decided to freeze BNP Paribas purchase of Fortis. The Supreme Court has since accused the Prime Minister’s staff of trying to influence the court.
French bank takes over Fortis in Belgium
The international financial crisis is exacerbated and a decision is taken that Forti’s assets in Belgium will be saved by French bank BNP Paribas. However, several shareholders are trying to stop the sale.
Effort to save bank
Together with the Netherlands and Luxembourg, Belgium agrees to donate money to the financial empire Fortis, which has experienced major financial problems in the international financial crisis. The Belgian government also agrees with France and Luxembourg to rescue another troubled financial institution, Dexia bank.
The prime minister is trying to step down
The Prime Minister has promised to present a draft constitutional amendment on July 15, but the parties have continued to find it difficult to agree. Deadlock prevails in the issue of power distribution, and the infected question of electoral rules in the district of Brussels-Halle-Vilvoorde is also not resolved. Leterme submits his resignation, but the king rejects the request.
Government ready at the last moment
Shortly before a deadline expires that would have forced new elections, the government question resolves. Just over nine months after the election, a five-party government coalition is formed: Christian Democratic CD&V and Liberal Free Flemish Liberals and Democrats (VLD) from Flanders, and from Wallonia’s Liberal Reform Movement (MR), Socialist Party (PS) and the Middle Party Humanist Democratic Center (CDH). CD&V’s Yves Leterme becomes prime minister.
Settlement on decentralization
The major parties agree that some federal power should be transferred to the regions. The changes are not as far-reaching as the Flemish parties demanded, but the settlement nevertheless paves the way for the country to be able to return to normal political conditions.