"Within one month our revenues had jumped over 50%."

Belgium Economy Facts

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The country of Belgium is at the very heart of the European Union. Its capital, Brussels, has many of the EU’s major governmental organizations such as the European Parliament and the European Council. So basically, as the rest of Europe goes, so does Belgium. But just like most of Europe, the Belgian economy is highly developed and is one of the most globalized economies on the planet. According to the IMF, Belgium’s GDP is $465.676 billion in nominal terms, while its nominal GDP per capita is $42,630. So the Belgium market is clearly one of the richest markets in Europe and therefore the world.Belgium’s strongly globalized economy and its transportation infrastructure are integrated with the rest of Europe. Its location at the heart of a highly industrialized region helped make it the world’s 15th largest trading nation in 2007, according to the CIA World Factbook. As the Belgian Foreign Ministry cites, the economy is characterized by a highly productive work force, high GNP and high exports per capita. Belgium’s main imports are raw materials, machinery and equipment, chemicals, raw diamonds, pharmaceuticals, foodstuffs, transportation equipment, and oil products. Its main exports are machinery and equipment, chemicals, finished diamonds, metals and metal products, and foodstuffs, as noted by the CIA World Factbook. One of the founding members of the European Union, Belgium strongly supports an open economy and the extension of the powers of EU institutions to integrate member economies. The Belgian economy is heavily service-oriented and shows a dual nature: a dynamic Flemish economy and a Walloon economy that lags behind, according to an article by Expatica Communications.  As a result, industry is concentrated mainly in the populous Flanders in the north, around Brussels and in the 2 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 virtually no natural resources. 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. 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. However, there are some problems on the horizon that may make the Belgian market difficult to do trade in.

The biggest short-term problem that Belgium faces is the current Eurozone crises. According to the US State Dept, 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. However, this heavy dependence on EU members makes it highly susceptible to any downturn in member economies, and since most of the Eurozone members are in crises, this will likely spill into the Belgian economy. Another problem that plagues the Belgian economy is the Belgian government and debt.  With Belgium’s accumulated public debt at a whopping high of 99% of 2009 GDP. The Belgian market is also unlikely to grow due to low immigration rates and low birth rates. The Belgian birth rate is also below 2.0, meaning parents are having only one child instead of two, which ultimately results in a shrinking of the population. Plus, the population of Belgium is not that large to begin with Eurostat estimating it at approximately 11 million in 2011. The biggest problem that Belgium faces is that there is an increasingly volatile conflict between the French an Dutch community of Belgium, due to the economic and cultural disparity between the Dutch and French speaking parts of the country. These still-active conflicts have caused far-reaching reforms of the formerly unitary Belgian state into a federal state which may lead to a complete partition of the country in the future, as reported by many news sources, such as the San Francisco Chronicle, BBC, and the Daily Telegraph.
Overall, the prospect of the Belgian market is largely mixed. While Belgium is highly developed and has a rich market, it is also largely stagnant in terms of growth. The science and technology base of Belgium is quite strong as well, with many large MNCs engaging in research in Belgium, but it is unlikely that this will allow Belgium to overcome some of the major problems that it faces in growing. Plus, the Eurozone crises is increasingly getting more and more out of hand for member countries, especially the smaller ones. There were also some rumors of Belgium getting downgraded in the future, which is likely considering the high public debt that the Belgian government has racked up over the years. So the prospect of doing business in Belgium in the future, seems mixed at the current moment.

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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