Economy of Belgium

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Economy of Belgium

Business district in the Schaerbeek neighborhood of Brussels

Currency Euro (EUR, €)

Fiscal year Calendar year

Trade organisations EU, WTO and OECD

Country group Developed/Advanced[1]

High-income economy[2]

Statistics

Population  11,549,888 (1 January 2020)[3]

GDP  $609 billion (nominal, 2022)[4]

 $715 billion (PPP, 2022)[4]

GDP rank 25th (nominal, 2022)

36th (PPP, 2022)

GDP growth 1.5% (2018) 1.4% (2019)

−8.3% (2020e) 5.4% (2021e)[4]
GDP per capita  $52,485 (nominal, 2022)[4]

 $61,587 (PPP, 2022)[4]

GDP per capita rank 18th (nominal, 2022)

20th (PPP, 2022)

GDP by sector agriculture: 0.7%

industry: 22.1%

services: 77.2%

(2017 est.)[5]
Inflation (CPI) 0.6% (2020 est.)[4]

1.2% (2019)[4]

2.3% (2018)[4]
Population  19.5% at risk of poverty or social exclusion (AROPE, 2019)
below poverty line
[6]

Gini coefficient  25.1 low (2019, Eurostat)[7]

Human Development  0.937 very high (2021)[8] (13th)
Index
 0.874 very high (12th) (2021)[9]
Labour force  5,105,726 (2020)[10]

 69.7% employment rate (Target: 73.2%; 2018)[11]

Labour force by agriculture: 1.3%
occupation
industry: 18.6%

services: 80.1%

(2013 est.)[5]

Unemployment  5.1% (August 2020)[12]

 13.0% youth unemployment (15 to 24 year-olds; June 2020)

[13]

Average gross salary €3,401 / $3,821 monthly (May, 2017)

Average net salary €2,170 / $2,438 monthly (May, 2017)

Main industries engineering and metal products, motor vehicle assembly,

transportation equipment, scientific instruments, processed

food and beverages, chemicals, pharmaceuticals, base metals,

textiles, glass, petroleum

Ease-of-doing-  46th (very easy, 2020)[14]
business rank

External

Exports  $547.5 billion (2021)[5]

Export goods chemicals, machinery and equipment, finished diamonds,

metals and metal products, foodstuffs

Main export partners  Germany(+) 16.6%

 France(+) 14.9%

 Netherlands(+) 12%
  United Kingdom(+) 8.4%

 Italy(+) 4.9%

 United States(+) 4.8%

(2017)[5]

Imports  $395.7 billion (2020)[5]

Import goods raw materials, machinery and equipment, chemicals, raw

diamonds, pharmaceuticals, foodstuffs, transportation

equipment, oil products

Main import  Netherlands(+) 17.3%
partners
 Germany(+) 13.8%

 France(+) 9.5%

 United States(+) 7.1%

 United Kingdom(+) 4.9%

 Ireland(+) 4.2%

 China(-) 4.1%

(2017)[5]
FDI stock  $1.035 trillion (31 December 2017 est.)[5]

 Abroad: $1.159 trillion (31 December 2017 est.)[5]

Current account  $1.84 billion (2019 est.)[5]
Gross external debt  $1.281 trillion (31 March 2016 est.)[5]

Public finances
Public debt  98.6% of GDP (2019)[15]

 €467.160 billion (2019)[15]

Budget balance €9.0 billion deficit (2019)[15]
−1.9% of GDP (2019)[15]

Revenues 50.3% of GDP (2019)[15]

Expenses 52.2% of GDP (2019)[15]

Economic aid $1.978bn (2006)

Credit rating Standard & Poor's:[16]

AA (Domestic)

AA (Foreign)

AAA (T&C Assessment)

Scope:[17]

AA-

Outlook: Stable
Foreign reserves  $31.76 billion (April 2021 est.)[5]
 All values, unless otherwise stated, are in US dollars.

The economy of Belgium is a modern, capitalist economy that has capitalised on the

country's central geographic location, highly developed transport network, and
diversified industrial and commercial base. Belgium was the first country to undergo
an Industrial Revolution on the continent of Europe in the early 19th century. It has
since developed an excellent transportation infrastructure of ports, canals, railways, and
highways, in order to integrate its industry with that of its neighbours. [18]
Industry is concentrated mainly in the populous region of Flanders in the north,
around Brussels and in the two biggest Walloon cities, Liège and Charleroi, along
the sillon industriel. Belgium imports raw materials and semi-finished goods that are
further processed and re-exported. Except for its coal, which is no longer economical to
exploit, Belgium has few natural resources other than fertile soils. Nonetheless, most
traditional industrial sectors are represented in the economy, including steel, textiles,
refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and
machinery fabrication. Despite the heavy industrial component, services account for
74.9% of GDP, while agriculture accounts for only 1% of GDP. [18]
With exports equivalent to over two-thirds of GNP, Belgium depends heavily on world
trade. Belgium's trade advantages are derived from its central geographic location and a
highly skilled, multilingual, and productive work force. One of the founding members of
the European Community, Belgium strongly supports deepening the powers of the
present-day European Union to integrate European economies further.[18] About three-
quarters of its trade is with other EU countries. Together with the Netherlands and
Luxembourg, Belgium is also one of Benelux member states. Belgium began circulating
the euro currency in January 2002.
As of 2021, Belgium's public debt was about 108% of GDP.[19]

Contents

 1History
o 1.1In the twentieth century
o 1.2In the twenty-first century
o 1.3Trade unions
o 1.4Belgium
 2Trade
 3Employment
 4Budget
 5Regional differences
o 5.1Brussels
o 5.2Flanders
o 5.3Wallonia
 6Data
 7See also
 8References
 9External links

History[edit]
In the twentieth century[edit]

Evolution of the Belgian GDP

For 50 years through World War II, French-speaking Wallonia was a technically

advanced, industrial region, with its industry concentrated along the sillon industriel,
while Dutch-speaking Flanders was predominantly agricultural with some industry,
mainly processing agricultural products and textiles. This disparity began to fade during
the interwar period. When Belgium emerged from World War II with its industrial
infrastructure relatively undamaged thanks to the Galopin doctrine, the stage was set for
a period of rapid development, particularly in Flanders. The postwar boom years,
enhanced by the establishment of the European Union and NATO headquarters
in Brussels, contributed to the rapid expansion of light industry throughout most of
Flanders, particularly along a corridor stretching between Brussels and Antwerp, which
is the second largest port in Europe after Rotterdam.[18]
Foreign investment contributed significantly to Belgian economic growth in the 1960s. In
particular, U.S. firms played a leading role in the expansion of light industrial and
petrochemical industries in the 1960s and 1970s. [18]
The older, traditional industries of Wallonia, particularly steel industry, began to lose
their competitive edge during this period, but the general growth of world prosperity
masked this deterioration until the 1973 and 1979 oil price shocks and resultant shifts in
international demand sent the economy into a period of prolonged recession. In the
1980s and 1990s, the economic center of the country continued to shift northwards to
Flanders with investments by multinationals (Automotive industry, Chemical industry)
and a growing local Industrial agriculture (textiles, food).
The early 1980s saw the country facing a difficult period of structural adjustment caused
by declining demand for its traditional products, deteriorating economic performance,
and neglected structural reform. Consequently, the 1980–82 recession shook Belgium
to the core—unemployment mounted, social welfare costs increased, personal debt
soared, the government deficit climbed to 13% of GDP, and the national debt, although
mostly held domestically, mushroomed.
Against this grim backdrop, in 1982, Prime Minister Martens' center-right coalition
government formulated an economic recovery program to promote export-led growth by
enhancing the competitiveness of Belgium's export industries through an 8.5%
devaluation. Economic growth rose from 2% in 1984 to a peak of 4% in 1989. In May
1990, the government linked the Belgian franc to the Deutsche Mark, primarily through
closely tracking German interest rates. Consequently, as German interest rates rose
after 1990, Belgian rates have increased and contributed to a decline in the economic
growth rate. In 1992–93, the Belgian economy suffered the worst recession since World
War II, with the real GDP declining 1.7% in 1993. [citation needed]
On 1 May 1998, Belgium became a first-tier member of the European Monetary Union.
In the twenty-first century[edit]
Belgium switched from the Belgian franc to the Euro as its currency after 1 January
2002. Belgian per capita GDP ranks among the world's highest. In 2008, the per capita
income (PPP) was $37,500. The federal government has not managed to present
balanced budgets in recent years and public debt remains high, at 99% of 2009 GDP.
[citation needed]
 In 2009 Belgium suffered negative growth and increased unemployment,
stemming from the worldwide banking crisis.[20] GDP growth in 2009 was negative at
−1.5%.[18]
Trade unions[edit]
Belgium[edit]
Main article: List of trade unions in Belgium
With 65% of the workers belonging to a union, Belgium is a country with one of the
highest percentages of trade union membership. Only the Scandinavian countries have
a higher trade union density. The biggest union with around 1.7 million members is the
Christian democrat Confederation of Christian Trade Unions (ACV-CSC) which was
founded in 1904.[21] The origins of the union can be traced back to the "Anti-Socialist
Cotton Workers Union" that was founded in 1886.[22] The second biggest union is the
socialist General Federation of Belgian Labour (ABVV-FGTB) which has a membership
of more than 1.5 million.[23] The ABVV-FGTB traces its origins to 1857, when the first
Belgian union was founded in Ghent by a group of weavers. This and other socialist
unions became unified around 1898. The ABVV-FGTB in its current form dates back to
1945. The third major multi-sector union in Belgium is the liberal (classical liberal)
union General Confederation of Liberal Trade Unions of Belgium (ACLVB-CGSLB)
which is relatively small in comparison to the first two with a little under 290 thousand
members.[24] The ACLVB-CGSLB was founded in 1920 in an effort to unite the many
small liberal unions. Back then the liberal union was known as the "Nationale Centrale
der Liberale Vakbonden van België". In 1930, the ACLVB-CGSLB adopted its current
name.[25]
Besides these "big three" there are a number of smaller unions, some more influential
than others. These smaller unions tend to specialize in one profession or economic
sector. Next to these specialized unions there is also the Neutral and Independent
Union that rejects the pillarization of the "big three" trade unions (their affiliation with
political parties). There is also a small Flemish nationalist union that exists only in
the Flemish-speaking part of Belgium, called the Vlaamse Solidaire Vakbond. The last
Belgian union worth mentioning is the very small, but highly active anarchist union
called the Vrije Bond.
Trade[edit]

A proportional representation of Belgium exports, 2019

About 80% of Belgium's trade is with fellow EU member states. Given this high
percentage, it seeks to diversify and expand trade opportunities with non-EU countries.
The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable
and open trade and investment climate. The European Commission negotiates on trade
issues for all member states, which, in turn lessens bilateral trade disputes with
Belgium.[18]
The Belgian Government encourages new foreign investment as a means to promote
employment. With regional devolution, Flanders, Brussels, and Wallonia are now
courting potential foreign investors and offer a host of incentives and benefits. [18] Foreign
companies in Belgium account for approximately 11% of the total work force, with the
U.S.
Attracted by the EU 1992 single-market program, many foreign firms and lawyers have
settled in Brussels since 1989.[18]

Employment[edit]
The social security system, which expanded rapidly during the prosperous 1950s and
1960s, includes a medical system, unemployment insurance coverage, child
allowances, invalid benefits, and other benefits and pensions. With the onset of a
recession in the 1970s, this system became an increasing burden on the economy and
accounted for much of the government budget deficits. The national unemployment
figures mask considerable differences between Flanders and Wallonia. Unemployment
in Wallonia is mainly structural, while in Flanders it is cyclical. Flanders' unemployment
levels are generally only about half those of Walloon. The southern region continues a
difficult transition out of sunset industries (mainly coal and steel), while sunrise
industries (chemicals, high-tech, and services) dominate in Flanders. [18]
Belgium's unemployment rate was 6.5% in 2008. A total of 4.99 million people make up
Belgium's labor force. The vast majority of these people (80%), work in the service
sector. Belgian industry claims 19% of the labor force and agriculture only 1%. As in
other industrialized nations, pension and other social entitlement programs have
become a major concern as the baby boom generation approaches retirement.[18]
Budget[edit]

Evolution of the Belgian public debt as % of Belgian GDP.

Although Belgium is a wealthy country, public expenditures far exceeded income for
many years, and taxes were not diligently pursued. The Belgian Government reacted to
the 1973 and 1979 oil price hikes by hiring the redundant work force into the public
sector and subsidizing industries like coal, steel, textiles, glass, and shipbuilding, which
had lost their international competitive edge. As a result, cumulative government debt
reached 121% of GDP by the end of the 1980s. However, thanks to Belgium's high
personal savings rate, the Belgian Government financed the deficit from mainly
domestic savings, minimizing the deleterious effects on the overall economy. [18]
The federal government ran a 7.1% budget deficit in 1992 at the time of the EU's Treaty
of Maastricht, which established conditions for Economic and Monetary Union (EMU)
that led to adoption of the common Euro currency on 1 January 2002. Among other
criteria spelled out under the Maastricht treaty, the Belgian Government had to attain a
budget deficit of no greater than 3% of GDP by the end of 1997; Belgium achieved this,
with a total budget deficit in 2001 (just prior to implementation of the Euro) that
amounted to 0.2% of GDP. The government has balanced the budget every year since,
until 2009 where it ran a deficit of about $25 billion. Belgium's accumulated public debt
remains high at 99% of 2009 GDP.[18] A slight decrease in the accumulated public debt
compared to GDP has been seen, however, thanks to a higher economic growth rate
compared to the budget growth rate, which pushed the percentage from 99% of GDP in
2009 to 95% of GDP in 2011, a four-point decrease in two years, a feat rare enough to
mention in the Western World.

Regional differences[edit]
The economy of Belgium is varied and cannot be understood without taking the regional
differences into account. Indeed, Flemish and Walloon economies differ in many
respects (consider for instance Eurostat and OECD statistics), and cities like Brussels,
Antwerp, Liège, Bruges, Charleroi or Ghent also exhibit significant differences. In
general, productivity in Flanders is roughly 20% higher (per inhabitant) than in
Wallonia[citation needed]. Brussels' GDP per capita is much higher than either region, although
this is in many ways artificial, as many of those that work in the Brussels-Capital
Region live in Flanders or Wallonia. Their output is counted in Brussels and not where
they live, artificially raising the per capita GDP of Brussels and slightly lowering that of
Flanders and Wallonia.
Unemployment has remained consistently more than twice as high in Wallonia than in
Flanders, and even more in Brussels, during most of the last 20 years (2012: Flanders:
4.55%; Wallonia: 10.12% and Brussels: 17.47% [26]).

Gross Domestic Product in Belgium (2006)[27]

2006 GDP
(PPP) % of the average GDP
Rank NUTS region
per capita of EU27 in 2006
in Euros

1 Brussels 55,100 233.3

2 Flemish Region 27,900 118.0

3 Walloon Region 20,100 85.1

Brussels[edit]
Being the de facto European capital, its economy is massively service-oriented. It has a
number of regional headquarters of multinational corporations. It is also host to a great
number of European institutions, in addition to the Belgian federal government, the
government of the Flemish Community and the government of the French Community.
Brussels also has many commuters, with 230,000 coming from Flanders, and 130,000
from Wallonia. Much of the success of Brussels is based on the high educational skills
of its workforce. As of July 2012, however, the statistical unemployment rate in Brussels
was 20.6%.[28]
Flanders[edit]

The Bevrijdingsdok [nl] container terminal in the port of Antwerp

In 2004 the port of Antwerp was the second largest European sea port by cargo volume,
and the Antwerp freight railway station accounts for one-third of Belgian freight traffic.
Antwerp is the first diamond market in the world, diamond exports account for roughly
1/10 of Belgian exports. The Antwerp-based BASF plant is the largest BASF-base
outside Germany, and accounts on its own for about 2% of Belgian exports. Other
industrial and service activities include car manufacturing, telecommunications,
photographic products.
The port of Bruges-Zeebrugge is one of the most important, modern and fastest
growing[29] ports in Europe. It is Europe's largest port for RoRo traffic[30] and natural gas.
[31]
 It also is the world's largest port for the import and export of new vehicles. [32] Tourism
is also a major component of the economy of Bruges. Due to its pristine medieval city
centre, Bruges has become a popular tourist destination. Annually about 2.5 million day
tourists visit the city and in 2007 there were about 1.4 million overnight stays.
The port of Ghent, in the north of the city, is the third largest port of Belgium. It is
accessed by the Ghent–Terneuzen Canal, which ends near the Dutch port
of Terneuzen on the Western Scheldt. The port houses, among others, big companies
like ArcelorMittal, Volvo Cars, Volvo Trucks, Volvo Parts, Honda, and Stora Enso.
The Ghent University, the second largest university of Belgium by number of students,
and a number of research oriented companies are situated in the central and southern
part of the city. Tourism is increasingly becoming a major employer in the local
area. Begonias have been cultivated in the Ghent area since 1860. Belgium is the
world's largest producer of begonias, planting 60 million tubers per year. Eighty percent
of the crop is exported.[33]
Wallonia[edit]
In the past, Liège was one of the most important steel-making centres in Europe.
Starting in 1817, John Cockerill extensively developed the iron and steel industry. The
industrial complex of Seraing was the largest in the world. Although now a shadow of its
former self, steel production and the manufacture of steel goods remain important.
Liège has also been an important centre for gunsmithing since the Middle ages and the
arms industry is still strong with the headquarters of FN Herstal. The economy of the
region is now diversified, the most important centers are mechanical industries (aircraft
engine and Spacecraft propulsion), space technology, information
technology, biotechnology and also production of water, beer or chocolate. Liège
Science Park south east of the city, near the University of Liège campus, houses spin-
offs and high technology businesses. Liège is also a very important logistic center: the
city possesses the third largest river port in Europe, directly connected to
Antwerp, Rotterdam and Germany via the Meuse river and the Albert Canal. In
2006 Liège Airport was the 8th most important cargo airport in Europe. A new
passenger terminal was opened in 2005. It is also the main hub and the headquarters
of TNT Airways.
Charleroi features an industrial area, iron and steel industry, glassworks, chemicals, and
electrical engineering. Charleroi is in the center of a vast coal basin, called Pays Noir.
Many slag heaps still surround the city.[34] Charleroi is also known for its publishing
industry with Dupuis, one of the main publishers of Franco-Belgian comics, located in
Marcinelle.

Data[edit]

GDP per capita development of Belgium.

The following table shows the main economic indicators in 1980–2021 (with IMF staff
estimates in 2022–2027). Inflation under 5% is in green. [35]
GDP GDP
GDP Inflation Unemploymen Government
GDP per GDP per
growth rate t debt
Year capita (in Bil.
capita
(in Bil. US$nominal) (in
(in US$ (in US$ (real) (in Percent) (in % of GDP)
US$PPP) Percent)
PPP) nominal)

1980 106.1 10,769.0 123.5 12,529.3 4.4% 6.7% 8.3% 76.8%

11,745 10,366
1981 115.8 102.2 -0.3% 7.6% 10.0% 89.7%
.0 .1
12,556 9,128.
1982 123.7 90.0 0.6% 8.7% 11.5% 99.6%
.1 6
13,083 8,626.
1983 129.0 85.0 0.3% 7.7% 10.7% 110.3%
.9 2
13,897 8,244.
1984 136.9 81.2 2.5% 6.3% 10.8% 114.6%
.6 8
14,566 8,568.
1985 143.6 84.5 1.7% 4.9% 10.1% 119.4%
.9 7
15,129 11,873
1986 149.2 117.1 1.8% 1.3% 10.1% 124.7%
.2 .8
15,851 14,740
1987 156.4 145.4 2.3% 1.6% 9.8% 129.2%
.6 .5
17,166 16,008
1988 169.5 158.1 4.7% 1.2% 8.8% 129.7%
.6 .6
18,362 16,098
1989 182.3 159.8 3.5% 3.1% 7.4% 126.4%
.2 .2
19,607 20,119
1990 195.0 200.1 3.1% 3.5% 6.6% 130.3%
.2 .9
 20,560 20,563
1991 205.3 205.4 1.8% 3.2% 6.5% 131.8%
.9 .7
21,276 22,823
1992 213.2 228.7 1.5% 2.3% 7.1% 134.7%
.7 .0
21,472 21,723
1993 216.2 218.7 -1.0% 2.5% 8.6% 138.9%
.2 .6
22,566 23,624
1994 227.9 238.6 3.2% 2.4% 9.8% 137.1%
.2 .5
23,519 28,458
1995 238.3 288.3 2.4% 1.3% 9.7% 131.3%
.1 .5
24,236 27,535
1996 245.8 279.3 1.3% 1.8% 9.6% 129.0%
.3 .3
25,521 24,878
1997 259.6 253.0 3.8% 1.5% 9.2% 124.3%
.1 .7
26,257 25,399
1998 267.6 258.9 2.0% 0.9% 9.3% 119.2%
.7 .2
27,513 25,309
1999 281.0 258.5 3.5% 1.1% 8.4% 115.4%
.1 .1
29,110 23,136
2000 298.1 236.9 3.7% 2.7% 6.9% 109.6%
.0 .5
30,021 23,067
2001 308.1 236.7 1.1% 2.4% 6.6% 108.2%
.8 .2
30,870 25,044
2002 318.3 258.2 1.7% 1.5% 7.5% 105.4%
.9 .3
31,665 30,707
2003 327.9 318.0 1.0% 1.5% 8.2% 101.7%
.3 .7
33,545 35,497
2004 348.7 369.0 3.6% 1.9% 8.4% 97.2%
.0 .6
35,232 36,945
2005 368.0 385.9 2.3% 2.5% 8.5% 95.1%
.8 .5
37,014 38,841
2006 389.1 408.3 2.6% 2.3% 8.3% 91.5%
.5 .8
39,140 44,496
2007 414.3 471.0 3.7% 1.8% 7.5% 87.3%
.3 .8
39,760 48,493
2008 424.1 517.3 0.4% 4.5% 7.0% 93.2%
.0 .1
38,891 44,892
2009 418.2 482.7 -2.0% 0.0% 8.0% 100.2%
.8 .2
40,162 44,448
2010 435.4 481.8 2.9% 2.3% 8.4% 100.3%
.4 .2
2011 451.9 41,082 523.2 47,564 1.7% 3.4% 7.2% 103.5%
 .4 .4
42,409 44,824
2012 469.7 496.5 0.7% 2.6% 7.7% 104.8%
.3 .2
43,755 46,848
2013 487.3 521.8 0.5% 1.2% 8.6% 105.5%
.2 .6
45,043 47,897
2014 503.6 535.5 1.6% 0.5% 8.7% 107.0%
.2 .0
46,365 41,147
2015 521.0 462.4 2.0% 0.6% 8.7% 105.2%
.2 .3
48,679 42,076
2016 550.6 475.9 1.3% 1.8% 7.9% 105.0%
.7 .4
50,726 44,274
2017 575.8 502.6 1.6% 2.2% 7.2% 102.0%
.6 .1
52,678 47,689
2018 600.5 543.6 1.8% 2.3% 6.0% 99.8%
.4 .5
54,481 46,740
2019 624.1 535.4 2.1% 1.2% 5.5% 97.7%
.0 .5
51,703 45,238
2020 595.7 521.3 -5.7% 0.4% 5.8% 112.8%
.3 .7
57,054 51,849
2021 659.3 599.1 6.2% 3.2% 6.3% 108.4%
.5 .3
62,065 50,597
2022 723.1 589.5 2.4% 9.5% 5.4% 103.9%
.1 .9
64,125 50,906
2023 751.7 596.7 0.4% 4.9% 5.6% 105.1%
.3 .1
66,336 52,786
2024 778.3 619.3 1.4% 1.8% 5.6% 107.2%
.5 .0
68,219 54,627
2025 802.1 642.3 1.2% 1.7% 5.6% 109.7%
.2 .8
70,140 56,487
2026 827.5 666.5 1.2% 1.7% 5.5% 112.3%
.6 .1
72,111 58,351
2027 853.6 690.7 1.2% 1.7% 5.5% 115.1%
.5 .9

See also[edit]
 Agriculture in Flanders
 Commemorative coins of Belgium
 Science and technology in Belgium
 List of largest companies in Belgium