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COUNTRY STUDY BELGIUM

By:

Dianne Gonsalves

MMS I (B)

Roll No. 75

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TABLE OF CONTENTS

Sr. No. Topic Pg. No.1 Introduction 32 Economy of Belgium 4

3 Gross Domestic Product 54 Balance of Trade 75 Balance of Payment 86 Inflation 97 Currency Exchange Rate 10

8 Interest Rates 119 Export Import Analysis 12

10 Human Development Index 14

11 Budget Analysis 15

12 Population 1613 CSR Law, Clean Energy Initiatives 17

14 Happiness Index 1715 Literacy Rate 1816 Corruption Rate 18

17 Unemployment Rate 1818 Poverty Rate 1919 FDI 19

20 Government 2021 Debt Analysis 2122 Financial Markets 2223 Growth Rates 23

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1. INTRODUCTION

Belgium , officially the Kingdom of Belgium , is a state in Western Europe. It is a founding

member of the European Union and hosts the EU's headquarters, as well as those of several

other major international organizations such as NATO. Belgium covers an area of

30,528 square kilometres (11,787 sq mi), and it has a population of about 10.8 million people.

Belgium's two largest regions are the Dutch-speaking region of Flanders in the north and the

French-speaking southern region of Wallonia.

Historically, Belgium, the Netherlands and Luxembourg were known as the Low Countries,

which used to cover a somewhat larger area than the current Benelux group of states. The

region was called Belgica in Latin because of the Roman province Gallia Belgica which

covered more or less the same area. From the end of the Middle Ages until the 17th century,

it was a prosperous centre of commerce and culture. From the 16th century until the Belgian

Revolution in 1830, when Belgium seceded from the Netherlands, many battles between

European powers were fought in the area of Belgium, causing it to be dubbed the

battleground of Europe, a reputation strengthened by both World Wars.

Upon its independence, Belgium eagerly participated in the Industrial Revolution and, during

the course of the 20th century, possessed a number of colonies in Africa. The second half of

the 20th century was marked by the rise of communal conflicts between the Flemings and the

Francophones fuelled by cultural differences on the one hand and an asymmetrical economic

evolution of Flanders and Wallonia on the other hand. These still-active conflicts have caused

far-reaching reforms of the formerly unitary Belgian state into a federal state which might

lead to a partition of the country.

Densely populated Belgium is located at the heart of one of the world's most highlyindustrialized regions. The first country to undergo an industrial revolution on the continent

of Europe in the early 1800s, Belgium developed an excellent transportation infrastructure of

ports, canals, railways, and highways to integrate its industry with that of its neighbours. One

of the founding members of the European Community (EC), Belgium strongly supports

deepening the powers of the present-day European Union to integrate European economies

further.

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2. ECONOMY OF BELGIUM

For 200 years through World War I, French-speaking Wallonia was a technically advanced,

industrial region, while Dutch-speaking Flanders was predominantly agricultural. This

disparity began to fade during the interwar period. As Belgium emerged from World War II

with its industrial infrastructure relatively undamaged, the stage was set for a period of rapid

development, particularly in Flanders. The post-war boom years contributed to the rapid

expansion of light industry throughout most of Flanders, particularly along a corridor

stretching between Brussels and Antwerp (now the second-largest port in Europe after

Rotterdam), where a major concentration of petrochemical industries developed.

The older, traditional industries of Wallonia, particularly steelmaking, 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 sent the economy into a period of

prolonged recession. In the 1980s and 1990s, the economic centre of the country continued to

shift northward to Flanders.

The modern, private enterprise economy of Belgium has capitalised on its central geographiclocation, highly developed transport network, and diversified industrial and commercial base.

The first country to undergo an industrial revolution on the continent of Europe in the early

19th century, Belgium developed an excellent transportation infrastructure of ports, canals,

railways, and highways to integrate its industry with that of its neighbours. Industry is

concentrated mainly in the populous Flanders in the north, around Brussels and in the 2

biggest Walloon cities, Lige 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.

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3. GROSS DOMESTIC PRODUCT

Economic growth is the increase in value of the goods and services produced by an economy.

It is conventionally measured as the percent rate of increase in real gross domestic product, or

GDP. The real GDP per capita of an economy is often used as an indicator of the average

standard of living of individuals in that country, and economic growth is therefore often seen

as indicating an increase in the average standard of living. However, there are some problems

in using growth in GDP per capita to measure general well being.GDP per capita does not

provide any information relevant to the distribution of income in a country.

The Gross Domestic Product (GDP) in Belgium expanded 0.40 percent in the third quarter of

2010 over the previous quarter. From 1980 until 2010, Belgium's average quarterly GDPGrowth was 0.58 percent reaching an historical high of 15.80 percent in March of 1995 and a

record low of -2.20 percent in December of 2008. Belgium is among the most highly

industrialized countries in Europe. Poor in natural resources, it imports raw materials in great

quantity and processes them largely for export. Exports equal around two thirds of GDP, and

about three-quarters of Belgium's foreign trade is with other European Union countries.

Real GDP is expressed in billions of national currency units; the base year is country-

specific.

GDP (official exchange rate):

352 billion (approx. $466 billion).

GDP - real growth rate:

2.1%

country comparison to the world:

-2.7%

0.8%
https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Belgium&countryCode=be&regionCode=eu#2195https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Belgium&countryCode=be&regionCode=eu#2003https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Belgium&countryCode=be&regionCode=eu#2003https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Belgium&countryCode=be&regionCode=eu#2195

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GDP composition by Sector:

Agriculture: (1% of GDP) Products --livestock, including dairy cattle, grain, sugarbeets, milk,

tobacco, potatoes, and other fruits and vegetables.

Industry: (24.3% of GDP) Types --engineering and metal products, motor vehicle assembly,

transportation equipment, scientific instruments, processed food and beverages, chemicals, basic

metals, textiles, glass, petroleum.

Trade: Exports --$261 billion: transportation equipment, diamonds, metals and metal products,

foodstuffs, chemicals.

Imports --$261 billion: Machinery and equipment, chemicals, diamonds, foodstuffs,

pharmaceuticals, transportation equipment, oil products.

The Belgian GDP is expected to grow approximately 1.2% in 2011.

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4. BALANCE OF TRADE

The balance of trade is the difference between the monetary value of exports and imports in

an economy over a certain period of time. A positive balance of trade is known as a trade

surplus and consists of exporting more than is imported; a negative balance of trade is known

as a trade deficit or, informally, a trade gap.

The balance of trade forms part of the current account, which also includes other transactions

such as income from the international investment position as well as international aid. If the

current account is in surplus, the country's net international asset position increases

correspondingly. Equally, a deficit decreases the net international asset position.

The Balance of Trade is identical to the difference between a country's output and its

domestic demand - the difference between what goods a country produces and how many

goods it buys from abroad; this does not include money present on foreign stocks, nor does it

factor the concept of importing goods to produce for the domestic market.

Belgium reported a trade deficit equivalent to 553 Million EUR in November of 2010.

Foreign trade accounts for approximately 70 percent of the Belgium's economy. About 80%

of Belgium's trade is with fellow EU member states. The major export commodity in

Belgium is the automobile, medicament mixtures put in dosage, not mounted or set

diamonds. Belgium imports mainly machinery and equipment, chemicals, diamonds,

pharmaceuticals, foodstuffs, transportation equipment and oil products.

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5. BALANCE OF PAYMENT

The balance-of-payments accounts of a country record the payments and receipts of the

residents of the country in their transactions with residents of other countries. If all

transactions are included, the payments and receipts of each country are, and must be, equal.

Any apparent inequality simply leaves one country acquiring assets in the others.

In the current account, goods, services, income and current transfers are recorded. In the

capital account, physical assets such as a building or a factory are recorded. And in the

financial account, assets pertaining to international monetary flows of, for example, business

or portfolio investments are noted.

Balance of Payments of Belgium

2009-2010 2008-2010

Particulars Amount (in

billions of Euro)

Amount (in

billions of Euro)

Current Account 4.6 4.6

Goods -1.3 -1.2

Services 6.8 6.7

Incomes 5.4 5.3

Current Transfers -6.2 -6.2

Capital Account -0.5 -0.7

Financial Account -2.2 -0.3

Direct Investment 24.1 18.0

Equity Capital 39.8 42.2

Other Capital -15.7 -24.3

Portfolio Investment -4.7 7.5

Financial Derivatives 0.9 -1.3

Other Transactions -22.0 -23.8

NBBs Reserves -0.5 -0.6

Errors & Omissions -1.9 -3.6

Source: National Bank of Belgium

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6. INFLATION

In mainstream economics, the word inflation refers to a general rise in prices measured

against a standard level of purchasing power. Previously the term was used to refer to an

increase in the money supply, which is now referred to as expansionary monetary policy or

monetary inflation. Inflation is measured by comparing two sets of goods at two points in

time, and computing the increase in cost not reflected by an increase in quality. There are,

therefore, many measures of inflation depending on the specific circumstances.

The most well known are the CPI which measures consumer prices, and the GDP deflator,

which measures inflation in the whole of the domestic economy. The prevailing view in

mainstream economics is that inflation is caused by the interaction of the supply of moneywith output and interest rates. Mainstream economist views can be broadly divided into two

camps: the "monetarists" who believe that monetary effects dominate all others in setting the

rate of inflation, and the "Keynesians" who believe that the interaction of money, interest and

output dominate over other effects. Other theories, such as those of the Austrian school of

economics, believe that an inflation of overall prices is a result from an increase in the supply

of money by central banking authorities.

The inflation rate in Belgium was last reported at 3.4 percent in December of 2010. From

1921 until 2010, the average inflation rate in Belgium was 6.06 percent reaching an historical

high of 222.81 percent in January of 1947 and a record low of -18.11 percent in October of

1921. Inflation rate refers to a general rise in prices measured against a standard level of

purchasing power.

When we talk about the rate of inflation in Belgium , this often refers to the rate of inflation

based on the consumer price index, or CPI for short. The Belgian CPI shows the change inprices of a standard package of goods and services which Belgian households purchase for

consumption. In order to measure inflation, an assessment is made of how much the CPI has

risen in percentage terms over a give period compared to the CPI in a preceding period. If

prices have fallen this is called deflation (negative inflation).

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7. CURRENCY EXCHANGE RATE

The euro is the official currency of Belgium, which is a member of the Euro Area, a currency

union among the European Union member states that have adopted the euro as their sole

official currency. In Belgium, interest rate decisions are taken by the Governing Council of

the European Central Bank. The Euro exchange rate (EURUSD) depreciated 3.29 percent

during the last 12 months. From 1975 until 2011 the EURUSD exchange averaged 1.18

reaching an historical high of 1.60 in April of 2008 and a record low of 0.64 in February of

1985. The Euro spot exchange rate specifies how much one currency, the EUR, is currently

worth in terms of the other, the USD. While the Euro spot exchange rate is quoted and

exchanged in the same day, the Euro forward rate is quoted today but for delivery and

payment on a specific future date.

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8. INTEREST RATES

The interest rate term structure is the relation between the interest rate and the time to

maturity of the debt for a given borrower in a given currency. For example, the current U.S.

dollar interest rates paid on U.S. Treasury securities for various maturities are closely

watched by many traders, and are commonly plotted on a graph such as the one on the right

which is informally called "the yield curve." More formal mathematical descriptions of this

relation are often called the term structure of interest rates.

Belgium is a member of the Euro Area, an economic and monetary union (EMU) of

European Union (EU) member states that have adopted the euro. The Euro Area benchmark

interest rate stands at 1.00 percent. In the Euro Area, interest rate decisions are taken by theGoverning Council of the European Central Bank. The primary objective of the ECBs

monetary policy is to maintain price stability. The ECBs Governing Council has de fined

price stability as "a year-on-year increase in the Harmonised Index of Consumer Prices

(HICP) for The Euro Area of below 2%. The European Central Bank is the sole issuer of

banknotes and bank reserves. That means it has the monopoly supplier of the monetary base.

By virtue of this monopoly, it can set the conditions at which banks borrow from the Central

Bank. Therefore it can also influence the conditions at which banks trade with each other inthe money market. In the short run, a change in money market interest rates induced by the

Central Bank sets in motion a number of mechanisms and actions by economic agents.

Ultimately the change will influence developments in economic variables such as output or

prices.

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9. EXPORT IMPORT ANALYSIS

BELGIUM E XPORTS

Belgium exports were worth 18950 Million EUR in December of 2010. Foreign trade

accounts for approximately 70 percent of Belgiums economy. About 80% of Belgium's trade

is with fellow EU member states. The major export commodity in Belgium is the automobile,

medicament mixtures put in dosage, and not mounted or set diamonds. Belgiums largest

exports markets are European Union and United Sates.

Belgium's chief exports are iron and steel (semi-finished and manufactured), chemicals,

textiles, machinery, road vehicles and parts, nonferrous metals, diamonds, and foodstuffs.

Belgium exports the final products that it manufactures.

15000

16000

17000

18000

19000

20000

Exports (in million Euros)

Exports (in million Euros)

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BELGIUM IMPORTS

Belgium imports were worth 19500 Million EUR (approx.) in December of 2010. Belgiumimports mainly machinery and equipment, chemicals, diamonds, pharmaceuticals, foodstuffs,

transportation equipment and oil products. It major import partners are: European Union

members (Germany, Netherlands, France, UK, Ireland) , United States and China.

Its imports are general manufactures, foodstuffs, diamonds, metals and metal ores, petroleum

and petroleum products, chemicals, clothing, machinery, electrical equipment, and motor

vehicles. Belgium imports many raw materials to make up for its lack of natural resources.

Very similar to the Belgium, the U.S. has many of the same imports. One of the main imports

in common is petroleum, which is a main import in almost every country. These imports

slightly show the standard of living in the country but barely. For instance if you are

importing a lot of diamonds or metals it may show you are more wealthy and therefore, you

may have a higher standard of living.

15000

16000

17000

18000

1900020000

Imports (in millions Euro)

Imports (in millions Euro)

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10. HUMAN DEVELOPMENT INDEX

The HDI is a summary measure for assessing long-term progress in three basic dimensions of

human development: a long and healthy life, access to knowledge and a decent standard of

living.

Belgiums HDI value for 2010 is 0.867 in the very high human development category

positioning the country at 18 out of 169 countries and areas.

The HDI is not designed to assess progress in human development over a short time period

because some of its component indicators do not change rapidly in response to policy

changes. This is particularly so for mean years of schooling and life expectancy at birth. It is,

however, useful to review HDI progress over the medium to long term. Between 1980 and

2010, Belgiums HDI value increased from 0.743 to 0.867, an increase of 17 per cent or

average annual increase of about 0.5 per cent. With such an increase Belgium is ranked 52 in

terms of HDI improvement based on deviation from fit, which measures progress in

comparison to the average progress of countries with a similar initial HDI level.

This table reviews Belgiums progress in each of the HDI indicators. Between 1980 and

2010, Belgiums life expectancy at birth increased by 7 years, mean years of schooling

increased by almost 3 years and expected years of schooling increased by 3 years. Belgiums

GNI per capita increased by 60 per cent during the same period.

Belgiums 2010 HDI of 0.867 is below the average of 0.879 for countries in the OECD. It is

also below the average of 0.878 for very high human development countries. From the

OECD, Belgiums 2010 HDI neighbours, i.e. countries which are close in HDI rank and

population size, are Austria and Switzerland, which had HDIs ranked 25 and 13 respectively.

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11. BUDGET ANALYSIS

A government budget is a legal document that is often passed by the legislature, and

approved by the chief executive-or president. For example, only certain types of revenue may

be imposed and collected. Property tax is frequently the basis for municipal and county

revenues, while sales tax and/or income tax are the basis for state revenues, and income tax

and corporate tax are the basis for national revenues. The two basic elements of any budget

are the revenues and expenses. In the case of the government, revenues are derived primarily

from taxes. Government expenses include spending on current goods and services, which

economists call government consumption; government investment expenditures such as

infrastructure investment or research expenditure; and transfer payments like unemployment

or retirement benefits. Budgets have an economic, political and technical basis. Unlike a pure

economic budget, they are not entirely designed to allocate scarce resources for the best

economic use. They also have a political basis wherein different interests push and pull in an

attempt to obtain benefits and avoid burdens. The technical element is the forecast of the

likely levels of revenues and expenses.

Belgium reported a government budget deficit equivalent to 6.00 percent of the Gross

Domestic Product (GDP) in 2009. Government Budget is an itemized accounting of thepayments received by government (taxes and other fees) and the payments made by

government (purchases and transfer payments). A budget deficit occurs when a government

spends more money than it takes in. The opposite of a budget deficit is a budget surplus.

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12. POPULATION

The population of Belgium on March 22nd 2011 is approximately 11,247,814.

Country comparison to the world: 79

Age Structure:

0-14 years: 16.1% (male 857,373/female 822,303)

15-64 years: 66.3% (male 3,480,072/female 3,419,721)

65 years and over: 17.6% (male 760,390/female 1,074,477) (2010 est.)

Population growth rate:

0.082% (2010 est.)


Birth rate:

10.1 births/1,000 population (2010 est.)


Death Rate:

10.5 deaths/1,000 population (July 2010 est.)


Sex ratio:

At birth: 1.045 male(s)/female

Under 15 years: 1.04 male(s)/female

15-64 years: 1.02 male(s)/female

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65 years and over: 0.71 male(s)/female

Total population: 0.96 male(s)/female (2010 est.)

Percentage of Population under the Poverty Line:

3.7 percent of the population falls under the poverty line which for Belgium is the lowest 10

percent income level.

13. CSR LAW, CLEAN ENERGY INITIATIVES

The CSR laws in Belgium are very active. A wide range of CSR policies including public

procurement. Freedom of association and collective bargaining are well entrenched principles

and practices. Citizens spend money on a range of sustainable products and services.

14. HAPPINESS INDEX

Traditionally, economists and others measure a nation's progress and prosperity by looking at

Gross Domestic Product (GDP), that is, the total output of good and services a country

produces for its own inhabitants or for sale to other nations. There is a growing tendency,

however, for economists to consider another measure, Gross National Happiness.

For the wealthy countries of the world, though not the developing countries, our instinct is

that it would be a mistake in the twenty-first century to focus excessively on ways to raise the

level or growth rate of GDP. The industrialized countries should use a broader conception

of well-being than the height of a pile of dollars. As economies get richer, they can afford toquestion the need for further riches. In a country where people are starving, economic growth

remains regarded as a vital objective to overcome hunger and other poverty problems.

One of the best-known attempts to move away from a simple reliance on GDP as a measure

of welfare is the Human Development Index (HDI) of the United Nations. Published every

year, the HDI is a score that amalgamates three indicators: lifespan, educational attainment,

and adjusted real income. The happiness index of Belgium is 7.44.

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15. LITERACY RATE

Education is the most important sector in any country. The performance of any country can

be assessed by the literacy rate of that country. The countries which have highest number of

educated people are the most advanced states in the world. These nations spend a lot of

money on educational sector.

The literacy rate in Belgium is 98%. Compare this to the U.S Literacy Rate of 99%. As you

can see, Belgium and the U.S both value education as it has an impact of the future of the

country. If the next generation does nt have the knowledge of how to run the country, then

the country will fall into shambles. Belgium spends about 10% of its GDP on education

whereas the U.S spends about 5.7% of its GDP. This shows that Belgium is trying to be veryactive in shaping its future.

16. CORRUPTION RATE

Belgium ranks 21st out of 180 countries in the Transparency International's 2009 Corruption

Perception Index, receiving a score of 7.1/10, with higher scores indicating less corruption.The U.S. Department of Commerce's 2010 Country Commercial Guide reports that Belgium

undertook a wholesale revision of its anti-bribery laws in the late 1990s. Belgian law has

criminalized the bribing of foreign officials. It has also extended the definition of corruption

to a significant degree, including both passive and active bribery as offenses and introducing

the concept of "private corruption" that is, corrupt activities carried out by private

individuals, not just officials.

17. UNEMPLOYMENT RATE

Unemployment is a problem in Belgium. Unemployment peaked at 14.3% and got to as low

as 4%. As of December 2010, the unemployment rate is 8%.

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18. POVERTY RATE

Poverty is a network of social exclusions that stretches over several areas of the individual

and collective existence. It separates from poor of the generally accepted living patterns of society. This gap cant be overcome by themselves.

Population: 10,414,336 (July 2010 estimated)

19. FDI

As a small open economy, Belgium has been actively and successfully attracting inward

foreign direct investment since the 1960s and consequently has one of the most

internationalized economies in the world. Foreign affiliates represent approximately 35% and

21% of manufacturing and services jobs as well as 42% and 24% of value added by the

manufacturing and services sector, respectively.

Despite its relatively small economic size of less than 3% of the European Unions GDP,

Belgium also has a strong FDI position in the EU. Belgium attracted between 5% and 20% of

EUs IFDI flows in the period 2002 -2009, a higher share than that of most other similar-sized

European countries. It is one of the most important host countries (third position) for IFDI in

the EU, accounting for over 11% of cumulative EU IFDI. The highly globalized Belgian

economy is characterized by a regionalized concentration of the source countries with

investments in Belgium. The lions share of Belgiums IFDI comes from European Union

countries, especially from Belgiums immediate neighbours. These neighbouring countries

account for about two- thirds of the countrys IFDI, distributed as follows: France 25%,

Germany 20%, the Netherlands 19%, and the United Kingdom 4%. US firms constitute one

of the largest non-European sources of IFDI in Belgium, although their importance is waning.

This regional concentration of IFDI is related to Bel giums central geographical location, to

the importance of Brussels as the political and administrative capital of the EU and, most

importantly, to Belgiums role in the distribution of goods and services across the European

continent.

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20. GOVERNMENT

Type: Parliamentary democracy under a constitutional monarch.

Independence: 1830.

Constitution: 1994 (revised).

Branches: Executive --King (head of state), Prime Minister (head of government), Council of

Ministers (cabinet). Legislative --bicameral parliament (Senate and House of Representatives).

Major political parties: Christian Democratic, Liberal, Socialist, Green, Flemish Nationalists,

Vlaams Belang (Flemish extreme right).

Suffrage: Over 18, compulsory.

Political subdivisions: Ten provinces, three regions, three communities, 589 municipalities.

Officially, Belgium is a federal parliamentary democracy under a constitutional monarchy.

This means that a king is the head of all government, but doesn't really hold the power. The

political power is held by a parliament. who are elected to their positions by the people.

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21. DEBT ANALYSIS

With the third highest debt in Europe, squabbling over a new government and the threat of

the country breaking up, Belgium has prompted speculation that it could be the Greece of the

North.

Economists say Belgium's relatively low budget deficit, solid economic growth and high

private savings ratio mean it is in better shape than nations on the euro zone's periphery, and

out of the firing line for now.

But that does not take into account herd-like financial markets, and the political situation in

Belgium looks more fractured than, for example, in Spain and Portugal.

The case against Belgium centres on a net debt of almost 100 percent of annual output (GDP)

-- the third highest level in the European Union last year behind Greece and Italy, its lack of a

new government and questions over its banks. The latter are coming off the drip-feed of

support supplied by the European Central Bank -- they borrowed just 5.8 billion euros ($7.8

billion) from the ECB in October, well below that of Irish peers.

Irish problems could yet harm Belgian banks, given they have $28.8 billion of claims

outstanding in Ireland, equivalent to some 6 percent of Belgium's expected 2010 national

output.

In Belgium's defence, while debt is high, a projected budget deficit under 5 percent of GDP is

below the euro zone average.

Its current account balance, a sign of whether the country as a whole is living within or

beyond its means, has been in surplus during and before the crisis, unlike Greece, Ireland,

Portugal, Italy and Spain. And Belgians are keen savers.

According to the OECD, Belgium's household net savings ratio was 11.5 percent of

disposable income in 2008, comparable with levels in Germany and France.

Perhaps most fundamentally, the Belgian economy is clearly growing, pulled along by giant

neighbour Germany.

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22. FINANCIAL MARKETS

Belgium's failure to form a government since elections in June 2010 threatens its ability to

manage its debt and could lead to a downgrade of its sovereign rating within six months,

Standard & Poor's said today.

The strong warning to Belgium, which has a debt-to-GDP level of about 100 per cent, places

it firmly in the category of riskier states in the euro zone debt crisis, with Greece and Ireland

already receiving EU help and Portugal and Spain threatened.

Standard & Poor's said it had concerns about Belgium's general fiscal outlook, its ability to

bring its budget deficit down to a target of 4.1 per cent next year, and the government's gross

borrowing requirement of around 11 per cent of GDP.

Belgium has largely escaped the pressures that have been brought to bear on bond markets in

Greece, Ireland, Portugal and Spain, although in recent weeks yields on 10-year benchmark

bonds have risen, with the spread over German bunds widening.

The International Monetary Fund said on Monday Belgium needed to quickly articulate a

plan to reduce its budget deficit to prevent debt market concerns from undermining its

economic recovery.

Belgium's real gross domestic product is expected to grow 1.7 per cent in 2011 versus about 2

per cent in 2010 - a rate driven by strong exports and inventory rebuilding. Financial market

concerns about sovereign risks in the euro area, Belgium's high public debt and political

uncertainty could dampen confidence, increase financing costs for the economy, and

undermine the recovery.

Belgium needs to develop and communicate a comprehensive strategy to reduce its budget

deficit to 3 per cent of gross domestic product by 2012 from 4.8 per cent in 2010.

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23. GROWTH RATE

The Gross Domestic Product (GDP) in Belgium expanded 2 percent in the fourth quarter of

2010 over the same quarter, previous year. Unlike the commonly used quarterly GDP growth

rate the annual GDP growth rate takes into account a full year of economic activity, thus

avoiding the need to make any type of seasonal adjustment. From 1981 until 2010, Belgium's

average annual GDP Growth was 2.42 percent reaching an historical high of 19.40 percent in

March of 1995 and a record low of -4.10 percent in June of 2009.

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REFRENCES

http://www.gfmag.com/gdp-data-country-reports/318-belgium-gdp-country-

report.html#axzz1H4Yz27RJ

http://www.traveldocs.com/be/economy.htm

http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=BEF

http://www.amcham.be/FocusarticleAmChamBelgium/tabid/489/smid/1161/ArticleID/455/D

efault.aspx

http://www.nbb.be/belgostat/DataAccesLinker?Lang=E&Dom=205&Table=50322

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Belgium (75)