Economy of Belgium

Belgium has a highly developed, high-income, mixed economy. It is well known for its strong and efficient system that supports its citizens. Belgium was one of the first countries in Europe to experience the Industrial Revolution in the early 1800s, which helped it grow into a powerful economic leader.

The country benefits greatly from its central location in Europe, making it easy for goods to move in and out. Belgium has an excellent transport network, including major ports like the Port of Antwerp, canals, railways, and highways. This helps Belgium connect with its neighbors and trade easily.

Belgium's economy is mostly based on services, which make up a large part of its total wealth. However, it also has strong industries, especially in the northern region of Flanders and cities like Liège and Charleroi. Even though Belgium does not have many natural resources except for its fertile soil, it imports materials and turns them into products to sell around the world.

Belgium depends a lot on trading with other countries, especially those in the European Union. In fact, most of its trade is with EU members. This strong focus on trade helps keep the Belgian economy growing and strong.

History

In the twentieth century

For 50 years through World War II, the French-speaking area of Wallonia was a highly industrial region, with factories along the sillon industriel. The Dutch-speaking area of Flanders was mostly farms, with some factories making food and clothes. This difference started to even out during the years between the world wars.

After World War II, Belgium’s factories were still standing, which helped the country grow quickly, especially in Flanders. The growth was helped by the European Union and NATO putting their main offices in Brussels. Light factories grew fast across Flanders, especially between Brussels and Antwerp, which is Europe’s second biggest port after the port of Rotterdam.

Foreign money helped Belgium’s economy grow in the 1960s. American companies helped build many light factories and chemical plants during the 1960s and 1970s.

The older factories in Wallonia, like the steel industry, started to struggle during this time. But the whole world was doing well, so the problems weren’t very clear until oil prices shot up and changed what people wanted to buy. This led to a long time of slow growth.

In the 1980s and 1990s, more money went into Flanders. Big companies from other countries built cars and chemicals there, and local farms grew more food and clothes.

The early 1980s were hard for Belgium. People bought less of what Belgium made, and the country’s money problems got worse. From 1980 to 1982, unemployment went up, costs for helping people rose, personal debts grew, the government spent too much, and the country’s total debt got very big.

In 1982, the leader of Belgium made a plan to help the economy grow by selling more things to other countries. This helped Belgium’s factories become better at making things people wanted to buy. The economy grew from 2% in 1984 to 4% in 1989. In May 1990, Belgium tied its money to Germany’s, which caused some problems later.

On 1 May 1998, Belgium joined the European Monetary Union.

In the twenty-first century

Belgium changed from the Belgian franc to the euro as its money after 1 January 2002. Belgium’s income per person is among the highest in the world. In 2008, the average income was $37,500. The government has had trouble balancing its budget, and the country’s debt stayed high, at 99% of all its money in 2009.^{[citation needed]} In 2009, during a big world economic problem, Belgium’s economy grew less, and more people lost their jobs. The economy grew by −1.5% in 2009.

COVID-19 Pandemic

Economic Policy & Impact of COVID-19

During the Covid-19 Pandemic, Belgium closed some businesses and asked people to work from home. This hurt many places, especially entertainment, shops that don’t sell food, and hotels. Their money dropped by about 70% to 90% in 2020. Other areas, like government jobs and schools, lost about 4% to 21% of their money. All together, Belgium’s economy shrank by 6.3% in 2020.

Shipping, which is about 7% of Belgium’s economy, dropped by about 3.4% in 2020. Car factories also did worse and kept doing worse after that.

People’s incomes went down because of Covid-19. About 40% of people lost their jobs, and overall incomes dropped by about 65% in 2020. Many people started working from home instead of going to a job.

Economic Policy of COVID-19

Belgium helped people and businesses with several plans. They made unemployment help last longer, paid more money to people who lost jobs, and gave extra money each day. Because of these plans, Belgium’s debt grew to 117.8% of all its money in 2021.

Trade unions

Main article: List of trade unions in Belgium

About 65% of workers in Belgium belong to a union, one of the highest rates in the world. Only countries in Scandinavia have more. The biggest union, with around 1.7 million members, is the Christian democrat Confederation of Christian Trade Unions (ACV-CSC), started in 1904. The second biggest is the socialist General Federation of Belgian Labour (ABVV-FGTB) with more than 1.5 million members, started in 1857. The third is the liberal union General Confederation of Liberal Trade Unions of Belgium (ACLVB-CGSLB) with about 290 thousand members, started in 1920. There are also smaller unions, some for special jobs or areas.

Trade

Belgium does a lot of its trade with other countries in the European Union, about 80% of it. Because of this, Belgium wants to trade more with countries outside the EU too. Belgium’s government likes to keep trade open and fair.

The government also wants more foreign companies to invest in Belgium, which helps create jobs. Regions like Flanders, Brussels, and Wallonia offer special benefits to attract these companies. Many foreign businesses have set up in Brussels since 1989, especially because of the EU’s single-market program.

European Commission

Employment

Belgium has a system to help people who lose their jobs, including medical care and money to help with living costs. This system grew a lot in the 1950s and 1960s but became harder for the country to afford when the economy slowed down in the 1970s.

In 2008, about 6.5% of people in Belgium did not have jobs. Most people, around 80%, work in jobs like shops, banks, and hospitals. About 19% work in factories and other industries, and only 1% work on farms. As more people get older, there are big discussions about how to manage money for pensions and other benefits.

Budget

Belgium is a wealthy country, but for many years, the government spent more money than it earned. To deal with rising oil prices in the 1970s, the government hired extra workers in public jobs and supported struggling industries. By the late 1980s, this led to a lot of debt — about as much as the country’s entire economy was worth.

In 1992, when Europe agreed to use a common currency, Belgium had to reduce its spending. It succeeded, and by 2001, when the Euro was introduced, Belgium’s spending was very close to its income. Since then, Belgium has usually balanced its budget, though it did spend more again in 2009. Even with this, Belgium’s debt is still high, though it has been slowly decreasing compared to the size of its economy.

Regional differences

Belgium's economy changes a lot depending on where you are in the country. The Flemish region, the Walloon region, and the city of Brussels all have different economic activities and challenges.

Brussels, as the capital of the European Union, focuses mainly on services and hosts many important companies and government offices. Flanders has major ports like Antwerp, which is very important for trading goods. Wallonia used to be famous for making steel but now has a mix of industries including technology and logistics. Each area has its own strengths and opportunities.

Brussels

Brussels is very focused on services because it is the capital of the European Union. Many big companies have their main offices here, and many important European institutions are based in the city. Brussels also has many people who commute from nearby areas. The city does well because of the skills of its workers, though there are still challenges with jobs available.

Flanders

In 2004, the port of Antwerp was one of the biggest ports in Europe for moving goods. Antwerp is also very important for trading diamonds and cars. The port of Bruges-Zeebrugge is growing fast and is very important for moving cars and natural gas. Bruges is also a popular place for tourists to visit because of its old buildings. The port of Ghent is home to many big companies and also has a lot of students and research activities. Ghent is also known for growing begonias, which are plants that Belgium exports around the world.

Wallonia

Liège used to be a big place for making steel, and some of that industry is still important today. Liège is also known for making guns and has companies that make airplane engines and space technology. The city is a key place for moving goods and has an important airport for cargo. Charleroi has industries like steel, glass, and chemicals, and it is also famous for publishing comic books.

Data

The following table shows the main economic indicators from 1980 to 2021, with some predictions for 2022 to 2027. When inflation is below 5%, it is shown in green.

Companies

In 2022, Belgium had the most companies in the Services sector, with 433,375 registered. The next largest sector was Finance, Insurance, and Real Estate, which had 169,544 companies.