Belgium - Economy

Economy

Belgium's strongly globalized economy and its transport 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. 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.

The Belgian economy is heavily service-oriented and shows a dual nature: a dynamic Flemish economy and a Walloon economy that lags behind. 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. Since 1922, through the Belgium-Luxembourg Economic Union, Belgium and Luxembourg have been a single trade market with customs and currency union.

Belgium was the first continental European country to undergo the Industrial Revolution, in the early 19th century. Liège and Charleroi rapidly developed mining and steelmaking, which flourished until the mid-20th century in the Sambre and Meuse valley and made Belgium among one of the three most industrialized nations in the world from 1830 to 1910. However, by the 1840s the textile industry of Flanders was in severe crisis, and the region experienced famine from 1846 to 1850.

After World War II, Ghent and Antwerp experienced a rapid expansion of the chemical and petroleum industries. The 1973 and 1979 oil crises sent the economy into a recession; it was particularly prolonged in Wallonia, where the steel industry had become less competitive and experienced serious decline. In the 1980s and 1990s, the economic centre of the country continued to shift northwards and is now concentrated in the populous Flemish Diamond area.

By the end of the 1980s, Belgian macroeconomic policies had resulted in a cumulative government debt of about 120% of GDP. As of 2006, the budget was balanced and public debt was equal to 90.30% of GDP. In 2005 and 2006, real GDP growth rates of 1.5% and 3.0%, respectively, were slightly above the average for the Euro area. Unemployment rates of 8.4% in 2005 and 8.2% in 2006 were close to the area average. By October 2010, this had grown to 8.5% compared to an average rate of 9.6% for the European Union as a whole (EU 27). From 1832 until 2002, Belgium's currency was the Belgian franc. Belgium switched to the euro in 2002, with the first sets of euro coins being minted in 1999. The standard Belgian euro coins designated for circulation show the portrait of King Albert II.

Despite a 18% decrease observed from 1970 to 1999, Belgium still had in 1999 the highest rail network density within the European Union with 113.8 km/1 000 km2. Due to the large population density in Belgium, this number corresponds to the quite low amount of 3.40% kilometers per capita in comparison to the mean EU value of 4.06%. On the other hand, the same period of time, 1970–1999, has seen a huge growth (+56%) of the motorway network. In 1999, the density of km motorways per 1000 km2 and 1000 inhabitants amounted to 55.1 and 16.5 respectively and were significantly superior to the EU's means of 13.7 and 15.9. Belgium however experiences some of the most congested traffic in Europe. In 2010, commuters to the cities of Brussels and Antwerp spent respectively 65 and 64 hours a year in traffic jams. Like in most small European countries, more than 80% of the airways traffic is handled by a single airport, the Brussels Airport. The ports of Antwerp and Zeebrugge share more than 80% of Belgian maritime traffic, Antwerp being the second European harbour with a gross weight of goods handled of 115 988 000 t in 2000 after a growth of 10.9% over the preceding five years.