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Belgium Economy News

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Belgium Economy News

Belgium’s economic history is filled with important turning points. Belgium became a dominant industrial nation in the early nineteenth century, leading the world in coal mining and textile production. The Treaty of London in 1839 affirmed Belgium’s independence and neutrality, promoting economic stability. Steel manufacturing saw a boom in the late 19th century, propelling industrial expansion. Despite the difficulties, Belgium experienced post-World War I reconstruction and a post-World War II economic boom. The founding of the European Coal and Steel Community in 1951 shaped its economic environment, paving the way for its entry into the European Economic Community in 1957. Belgium is one of the EU’s most successful countries today, with a diversified economy that includes services, chemicals, and pharmaceuticals. Recent years have demonstrated resilience; private consumption drove growth in 2021, while salary rises and tax reductions followed in 2022. Real wages increased in 2023, while financing difficulties hindered private residential investments. Pay growth is anticipated to keep pace with inflation until 2024, bolstering stability in the face of a declining deficit and worries about public debt. Under Prime Minister Alexander De Croo, the Vivaldi coalition is still navigating political and economic obstacles while establishing Belgium as a major player in the European arena.

According to recent news reports, the Belgian economy is facing a challenging environment. A seven-party coalition government came to power in 2020, laying the groundwork for the June 2024 general election. We expect economic growth in 2024 to fall somewhat short of historical norms due to tighter monetary policy and high inflation, which would reduce consumer spending power. A decline in foreign demand challenges Belgium’s export-driven economy, which heavily relies on a substantial chemical and pharmaceutical industry. We anticipate structural problems such as low labor participation rates and sluggish productivity development to constrain real GDP growth in the upcoming years, thereby determining the region’s economic trajectory.

Type of Economy in Belgium

The variety of sectors and the export-oriented nature of Belgium’s economy set it apart. In 2021, the nation’s GDP, which was heavily reliant on international trade, particularly with the European Union market, reached 507.2 billion euros. France, Germany, and the Netherlands are important trading partners. The agriculture sector grew in 2023, but the industrial sector made a substantial contribution to the GDP. With 80% of the working-age population employed and 69% of the GDP coming from it, the tertiary sector leads the economy. Brussels is all about services, but Flanders is the epicenter of petrochemicals. Belgium’s economy is resilient and well-positioned within Europe, despite obstacles including growing inflation and deficits.

Belgium GDP Growth

Several sources present a complex picture of Belgium’s GDP growth. The IMF forecast a slowdown to 0.9% in 2023 and a recovery to 1.4% in 2024, citing uncertainties, financial conditions, and inflation as major contributing factors. According to Trading Economics research, Q4 2023 will see an expansion of 0.30%, with an expected growth of 0.40%. According to data from the World Bank, growth was 0.30% throughout that time. Belgium faces several economic difficulties that will affect growth rates, including high levels of debt, inflation, and a decline in international commerce. The economy is resilient, but it still confronts structural and cyclical obstacles, which highlights the need for sustainable fiscal policies and increased European competitiveness.

Belgium Employment Trends

The employment developments in Belgium show a combination of encouraging signs and difficulties. The employment rate increased in 2023 for the fourth year in a row, indicating that the country is getting closer to its 80% target. Even so, there was only a small increase in the total number of jobs created because the rate of employment intensity was higher than the rate of job creation. The primary, secondary, and tertiary industries’ employment levels exhibit oscillations, as evidenced by data from 2022 and 2023. The overall number of employed individuals in Belgium’s labor force increased, with a predicted continual increase between 2023 and 2024, if only by a small margin of 0.01 million people.

Housing Market in Belgium

In particular, Belgium’s housing industry began to show signs of slowing down in Q4 of 2023 as demand for real estate declined in tandem with rising interest rates. The cost of housing has been rising, increasing by 4.8% in 2022, 6% in 2021, and 5.7% in 2020. However, declining demand and economic stagnation caused the market to slow down. After growing by 3.2% in 2022 and 6.3% in 2021, Belgium’s economy grew by 1.5% in 2023. The European Commission projects a real GDP growth rate of 1.4% in 2024 and 1.5% in 2025, whereas the IMF projects more moderate growth rates. Projections suggest that economic development will slow in the future.

Import and Export of Belgium

Belgium’s economy depends heavily on its import and export activity. Belgium will rank as the 13th largest exporter and the 14th largest importer in the world in 2022. The country’s main products were cars, medicines in packages, processed oil and gas, and vaccines. The US, the Netherlands, Germany, France, and Italy were the main places where the goods were sold. Vehicles, vaccines, refined petroleum, and pharmaceutical packaging were some of the most common things that came into Belgium from the US, Germany, France, the Netherlands, and China.

Number of Years

Import Volume

Export Volume

Major Importing Countries

2019

€403 billion

€424 billion

Germany, Netherlands, France

2020

€376 billion

€396 billion

Germany, Netherlands, France

2021

€398 billion

€418 billion

Germany, Netherlands, France

2022

€415 billion

€435 billion

Germany, Netherlands, France

2023

€430 billion

€450 billion

Germany, Netherlands, France

Major Economic Policies in Belgium

The goal of Belgian economic strategy has been to maximize new opportunities while minimizing the loss of already-existing ones. In 2014, the administration took major steps to increase the nation’s competitiveness. Changes in the job market and the retirement system were two of these. The government is closely examining them in an attempt to simplify its tax laws and attract foreign investment. In 2020, Brussels helped businesses deal with the COVID-19 pandemic by offering tax breaks and financial support. A key component of Belgium’s long-term economic growth strategy is fostering innovation by improving its digital environment and infrastructure. Benelux wants to see Europe’s economy grow strong and expand so it can meet the challenges and trends of the global economy.

Major Economic Policies in Belgium

Belgium’s political stance on the green economy is shown by its laws and initiatives. In 1997, Belgium strengthened its system of institutions for long-term growth. In 2007, a change to the constitution was made to make the system even stronger. We are looking into ways to save energy, keep buildings in good shape, and protect the earth in general. The policies of Flanders and Wallonia have a lot to do with environmental problems and goals. A lot of environmental technology projects, like the “Fit for 55” package and the Next Generation EU framework, get a lot of money and help from the European Union. As Belgium moves toward a strong economy, it is important for the country’s many businesses, groups, and governments to work together to promote new ideas and ensure long-term success.