Euromoney Country Risk

EUROMONEY COUNTRY RISK

Read the latest analysis on sovereign, geo-political and structural risk

 
Get up to date country risk ratings in 186 countries

Member login



Lost your password?

Euromoney Country Risk

Euromoney Country Risk
List of countries.

Belgium Belgium

Overview Change score Analyses Experts
 
Sponsored section
Belgium – Quick View
ECR score77.81 (Mar 2011)
ECR rank19 (Mar 2011)
Economic
GDP, 2010USD 453.97 billion
GNI per capita PPP, 2009USD 36,610
FDI inflow, 2009USD 31.65 million
Inflation, 2010 (November)3%
Central Bank Assets, 2010USD 26,674.28 million
Unemployment rate, 20108%
Government deficit, 2010 (Till Q3)USD 20,628.22 million
Tax Revenue, 2010 (Till Q3)USD 143,320.73 million
Political
Government typeConstitutional Monarchy
Recent political crisisNA
Economic freedom rank, 201132nd
Freedom of information rank, 201014th
Corruption perception index, 201022nd
Structural
Birth rate, 200910.15 per ‘000
Population BalanceUnder 14 - 16.8%
Population BalanceMen over 60 - 20.6%
Population BalanceWomen over 60 – 25.4%
Life expectancy yearsMale - 77 years
Life expectancy yearsFemale - 83 years
Mortality rate, 20094 per '000
Literacy rate99%
Internet access77.8%

[Top] Economic Overview

Belgium is an open market economy. It is a part of the EU and its currency is Euro. Belgium has been functioning in an economic union with Luxembourg forming BLEU (Belgium-Luxembourg Economic Union) since 1921.

NBB (National Bank of Belgium) is Belgium’s central bank. It launched stimulus packages to solve the nation’s debt crisis. The stimulus planis aimed at improving infrastructure, supporting the dependent population and reducing taxes. It has a positive influence on GDP, balance of payments and the current account.

(Sources: Euobserver, National Bank)

Gross Domestic Product (GDP)

In 2009 and 2010, Belgium’s GDP registered growth in all quarters. In Q4 2010, Belgium recorded a GDP of EUR 86.06 billion, an increase from EUR 83.17 billion in Q1 2009.

Belgium GDP

(Source: National Bank)

GDP Growth Rate

Belgium GDP Growth Rate

(Source: National Bank)

From Q4 2008 to Q3 2009, it witnessed a rise from -2.2% to 1% and from Q3 2009 to Q4 2010 the rate fluctuated between a low of 0.1% in Q1 2010 to a high of 1.1% in Q2 2010.

Gross National Income (GNI)

Belgium GNI

(Source: Worldbank)

From 2005 to 2008 Belgium’s GNI experienced steady growth and further declined by EUR 5.34 billion in 2010. GNI per capita at PPP was registered at USD 36,610 in 2009.

(Source: world Bank)

Inflation

Belgium Inflation

(Source: inflation.eu)

In 2008, Belgium’s inflation rate fell from the previous year by 0.6%. From November 2008 to November 2009, the rate increased sharply to 0.26% and reached 0.12% by November 2010.  

Tax Rate

The individual income tax rate in Belgium is 25-50% and the corporate tax rate is 33.99%. The VAT (Value-Added Tax) levied in the country is 21%. The country levies one of the highest corporate taxes in the world making it an expensive place for businesses to set up.

Asset-related transactions like inherited/ ancestral properties or purchase of property are heavily taxed.

(Source: worldwide-tax, National Bank)

Foreign Direct Investment (FDI) Inflows

Investments in Belgium are primarily from European nations including France, Luxembourg, Sweden, Japan, Finland and Spain. Belgium’s well developed logistics, transport and communication infrastructure have contributed to FDI inflows. From 2009, the recession impacted Belgium with low FDI inflows in the country.

(Sources:  National Bank)

Belgium FDI

 (Source: National Bank)

From 2009 to 2010, Belgium recorded high FDI inflow in Q2 2009 at EUR 16.99 million and Q1 2010 at EUR 11,148 million.

 Banking sector Assets

Belgium Reserve Assets

(Source: National Bank)

The nation’s central bank is the ‘National Bank of Belgium.’ Its reserve assets increased from January to June 2010. From June 2010 to January 2011, there were moderate fluctuations in the assets. As of 2011, the central bank holds a total of EUR 19,555 million worth of total reserve assets.

[Top] Financial Indicators & Government Financial

Consumer Price Index (CPI)

Belgium Consumer Price Index

(Source: National Bank)

In 2010, CPI was on a rise due to an increase in prices of food and basic necessities. The CPI increased from 0.8% in January to 3.4% in December.

Marginal Lending Rate

 

Belgium Marginal Lending Rate

 

(Source: National Bank)

The lending rate of the country declined from 5.23% in Q3 2008 to 1.75% in Q3 2009 and is registered to be constant from Q3 2009 till Q4 2010 at 1.75%.

(Source: National Bank)

Money supply (Currency in Circulation)

Belgium Money Supply

(Source: National Bank)

All the monetary aggregates of Belgium’s money supply: M1, M2 and M3 show a relatively stable transition from December 2009 to December 2010.

Public Debt

Belgium Public Debt

(Source: National Bank)

From 2008 to 2010 the country has had a constant rise in debts. The country relied on its Plan de Relance (economic stimulus package), launched at the end of 2008. The stimulus package was aimed to maintain the competitiveness of firms and keep employment rates stable.

Official Exchange Rate

Belgium Exchange Rate

(Source: National Bank)

From 2008 to 2010, the exchange rate of the EUR witnessed fluctuations against the USD. The lowest rate was recorded in Q2 2010 at 1.27 and highest in Q2 2008 at 1.56.

Government finances

Fiscal Balance

The fiscal balance registered a deficit of EUR 15,668.6 million in 2010 (till Q3).

 

Government Revenue and Expenditure (EUR million)

 Time Period

Total Revenue

Tax Revenue

Total Expenditure

Q3 2010

38,339.10

33,997.20

45,479.10

Q2 2010

47,633.30

42,153.00

47,247.60

Q1 2010

37,668.80

32,712.10

46,583.10

Q4 2009

46,193.90

41,803.10

47,037.10

Q3 2009

36,942.60

32,743.20

44,171.00

Q2 2009

45,061.60

39,868.40

46,274.90

Q1 2009

35,061.50

30,944.60

46,406.10

Q4 2008

47,176.80

42,701.50

45,262.10

Q3 2008

38,063.90

33,909.30

42,108.70

(Source: National Bank)

The Belgian Government recorded a fiscal deficit for the period of 2008 to 2010, except for Q4 of 2008 and Q2 of 2010.

In Q3 2010, tax revenue accounted for 88.68% i.e. EUR 33,997.2 million, out of the total revenue of EUR 38,339.1 million. Belgium has one of the highest corporate tax rates in the world including high VAT (Value Added Tax) on many consumer products, pharmaceuticals, television (cable) services and social housing.

(Source: Heritage.org)

Current Account Balance

Belgium Current Account Balance

(Source: National Bank)

The country’s current account balance was on a steady rise from Q3 2008 to Q2 2009. From Q2 to Q3 2009, the balance fell sharply to a deficit of EUR 2,535 million. Thereafter it resumed a rising trend till Q2 2010 to reach a surplus of EUR 6,145 million.

Balance of Payments

Belgium Balance of Payments

(Sources: National Bank)

From October 2009 to May 2010, Belgium’s balance of payments registered a deficit. From May to October 2010, the balance fluctuated strongly from a surplus of EUR 0.6 billion in June to a deficit of EUR 0.6 billion in August 2010. In October 2010, the balance amounted to a surplus of EUR 0.2 billion.

Foreign trade was low and Belgium’s manufacturing sector was negatively affected after the economic slowdown. Several manufacturing units were shut down or were temporarily held back operationally. In 2009, the total value of non-financial firms fell for the first time in 15 years. Despite heavy debts, the country managed to obtain a trade surplus towards the end of 2010.

(Sources: National Bank)

[Top] Labour Force and Employment Overview

Unemployment Rate

Belgium Unemployment Rate

(Source: National Bank)

The unemployment rate in Belgium remained reasonably stable from 2008 to 2010. Throughout the period 2008-10, it increased and decreased alternatively. The highest rate was registered at 8.7% in Q3 2010 and the lowest was at 6.8% in Q4 2008.

Level of Unionisation

The major labour welfare unions in Belgium are: Confederation of Christian Trade Unions, Federation of Liberal Trade Unions of Belgium, Belgian General Federation of Labour and Belgian Federation of Employers.

These associations have negotiated with the Government to facilitate pension schemes, unemployment benefits and a rise in minimum wage.

(Source: Eurofound.europa)

[Top] Political Stability

Government Stability

The country is a representative, parliamentary, constitutional monarchy. King Albert II (referred to as: the head of state)has been ruling since 1933. The Federal Government is the supreme authority in Belgium followed by the regional Government and the community councils.

The federal Government is responsible for foreign policy, social security, justice, defence and healthcare. Regional Governments handle the regional transport, economic matters, industrial issues and public works. The community councils deal with social development matters such as education and cultural activities.  There are three community councils which are linguistically divided into Dutch, French and German speaking communities.

The political scenario in Belgium has been in conflict between the region of Flanders and Wallonia. The Flanders region is governed by the New Flemish Alliance Party and the Socialist Party-Different. The Wallonia and Brussels regions have a coalition Government of the Socialist Party (PS), Humanist Democratic Centre (CdH) and Environment Groups (Ecolo).

The main national political parties are Christian Democrat (CD&V, CdH), Liberal (Open VLD, MR), Socialist (PS, SP.A) and Environment Groups (Ecolo and Green). These are further divided linguistically. These regions are based on the main languages that are spoken across the nation i.e. Dutch, French and German.

As of January 2011, the seven major political parties of Belgium failed to form a coalition Government. Long phases of political uncertainty have affected the country’s economy. Lack of regulatory policies has led to mounting debts, loose public spending and poor co-ordination between the northern and southern regions in the country.

(Sources: BBC, The Economist)

Regulatory Environment

Belgium Economic Freedom Indices

 

(Source: Heritage.org)

Belgium ranks 32nd in the 2011 Economic freedom index with a score of 70.2. It is the 18th freest amongst 43 European nations.

Corruption Perception

In 2010, Belgium ranked 22nd among 178 countries in the Corruption Perception Index, indicating a low corruption level. There are strict anti-bribery and anti money-laundering acts in place to check corruption and protect the confidentiality of any illegal activity related witnesses.

(Source: Transparency.org, oecd.org)

Freedom of Information

Belgium is ranked 14th on the Press Freedom Index 2010, with 4 points. It indicates a restrictive environment towards freedom of expression.

(Source: rsf.org)

Judicial System

The Government of Belgium has a judicial branch operated by courts and tribunals. All judiciary functions are established in the country’s constitutional framework. There is one Administrative Jurisdiction and Procedure Court for the country.

‘The Court of Cassation’ is the supreme authority of the judicial hierarchy. It checks if judgments are following constitutional procedures. Before any matter being taken to the ‘Court of Cassation, it has to go through the Courts of Appeal. There are five courts of appeal. They are located in Brussels, Mons, Antwerp, Liège and Ghent. There are Labour Courts at par with the Courts of Appeal in terms of its conduct.

Labour Courts are followed by Regional Courts, Commercial Courts, Industrial Tribunals and Magistrates' Courts. The Justices of Peace are at the bottom of the hierarchy. There are 187 justices of peace in the country.

(Sources: Belgian Federal Government,European Commission)

[Top] Demographic Overview

In 2010, the country is estimated to have a population of 10.86 million with a 0.5% growth rate from 2005 to 2010.

(Source: National Bank, UN.org)

In 2009, Belgium’s total population constituted of approximately 52% women and 48% men. Like other European countries, for over a decade, the female population in Belgium has always been on a higher side as compared to the male population.

(Sources: National Bank, Eurostat.ec)

 

Belgium Population by Gender

 

The mortality rate was 4 per 1000 births in 2009.

(Source: UNICEF)

In 2010, the average life expectancy in Belgium was 78.7 years.

(Source: undp: pg 139)

Belgium Population

 

E= Estimate

(Source: National Bank)

Belgium’s population has been increasing marginally at a constant pace since 2000. In 2000, the population was 10.26 million compared to 10.8 million in 2009.

(Sources: National Bank)

Racial/ Ethnic Environment

The country is provincially divided according to communities. There are three broad communities in Belgium: Flemish, French and German thus giving the country three official languages.

The Flemish community lives in the Flemish provinces. It is governed by the Flemish Parliament.

The French Community, in Walloon provinces, has its own Parliament and a separate Government.

The province of Liège is governed by the German-speaking community. This parliament comprises of 25 members, who are directly elected by the people.

All parliaments vote on decrees. The representation of members of respective parliaments in the federal senate is as follows: Flemish-10 members, French- 10 members and German- 1 member. 

(Sources: unhcr.org, Minorityrights.org)

Poverty and Inequality

Belgium scores better in terms of low poverty and inequality compared to other European regions. About 15% of Belgians live below the poverty line compared to 16% in the entire EU. Income inequality is also noted to be low in Belgium compared to other EU countries. The Belgian Government emphasizes on free and compulsory education between 6 to 18 years as a measure towards social development for the citizens.

(Sources: National Bank)

Human Development Index

The country is ranked 18th on United Nation’s Human Development Index. It lies in the category of ‘Very High Human Development’. HDI integrates a country’s life expectancy, schooling and income. This signifies the overall social and economic development of a nation. A rank between 1 and 42 indicates ‘very high human development’ on UNDP’s Index.

(Source: undp)

[Top] Soft Infrastructure

Education

The education system in the country is managed independently by the three main communities: Flemish, French and German. The federal Government determines the minimum age and basic educational qualifications. All other matters are handled by the regional Governments. Education is compulsory from 6 to 18 years old. Home schooling is also permitted by law, provided it meets the legal and academic provisions.

The coalition Government of 1999 implemented educational priorities in the ‘Policy documents: Education and Formation’. This involved setting up local participatory councils to involve the governing bodies in the education system, renewing the academic framework, emphasizing on equal opportunity education and establishing a link between education and the job market. Parents have the freedom to choose the type of education suitable for their children. Languages of education vary from region to region.

The basic structure of the system comprises of pre-school, primary, secondary and high-school education, followed by college and university levels. Funds are provided by the Council of Community Education to schools with the help of a supervisory Board of Accountants. The fund allocation has to be approved by the municipality and provincial Governments. Colleges and Universities receive funds that change according to the consumer price index and wage costs.

(Source: Unesco.org, Vlaanderen.be, European Youth Portal)

Healthcare Resources

Belgium has a well established healthcare system. After the Second World War, a compulsory public health insurance system was established. The amendment of Hospital Law in 1963 was a milestone in the healthcare development. Its clauses included: free access to healthcare for all citizens, establishing planning in the hospital structure, improving the quality of hospital facilities and ensuring economic viability of private and public hospitals. Patients have a choice between independent healthcare service providers.

The regulatory policies are controlled by the national and federal Governments. The sub-national Governments handle fee payments and reimbursements. The Ministry of Health draws the annual healthcare budget. It looks deeply into matters of child abuse and elderly abuse. The National Institute of Sickness and Invalidity Insurance manages the organization of healthcare insurance. The Medico-Mut, a committee of doctors and insurers, defines the medical services to be offered at general hospitals.

Most healthcare provisions are private. These consist of non-profit, legally-independent organizations. The health insurance schemes cover general risks and major risks. These schemes are dependent on income groups fixed by law. The care of beneficiaries- orphans, widows and disabled groups is covered by state welfare organizations. The system functions on the principle that the working community supports the unemployed and retired.   

(Sources: Euro.who, European Observatory, WHO.int)

[Top] Hard Infrastructure

Roads

Belgium has a well-maintained infrastructure with a good distribution and transport system. The total road network measures 118,414.6 km including 1747.4 km of motorways, 13,892 km of regional and provincial roads and 102,775.2 km of municipal roads.

(Source: Belgian Federal Government: Road km Excel Sheet)

Airports

Belgium is considered as a strategic European destination due to its central location. Its main airports are: Beauvechain, Brussels, Florennes, Klein Brogel, Liege and Ostend. These offer direct flights to Europe and other major locations overseas. 

(Source: Aircraft Charter)

Sea Ports

Belgium’s port at Antwerp is Europe’s second largest port. The port of Zeebrugge is one of the busiest car-transshipment ports in the world. The major terminals at the port are Toyota, SeaRo, Wallenius-Wilhelmsen Lines, CdMZ and CTO. It is an import terminal that handles natural gas imports and large foodstuff cargos, with product-specific cargo handling facilities. It also provides connections to leading European motorways. The total cargo throughput in the port grew by 11% in 2010.

The country also has the second most widespread canal network. Its road and rail networks as well as freight transport facilities are modern and strategically important trading facilities.

(Source: Flanders Investment and Trade, Port Of Zeebrugge)

Telecommunication Network

The infrastructure for mobile and landline telecom networks is well established in Belgium. Major telephone line providers are Belgacom, Scarlet, Euphony, Tele2, Telenet, Tellink and Versatel. The main mobile phone service operators are Proximus, Mobistar and BASE.

The leading cable television companies in the country are Telenet, VOO, Coditel, Integan, Infrax and PBE.

VRT, RTBF and BRF are the broadcasters funded by the Flemish, French and German communities respectively. Radio 1, Donna, Studio Brussel, Vivacité, Pure FM and Das Hitradio are popular radio stations. Besides these, there are other independently managed and controlled radio stations like NRJ, Nostalgie and Radio Contact.

(Source: Embassy to Belgium)

As of 2010, 8,113,200 Belgians were Internet users, which accounts for 77.8% of the total population.

(Source: Internet World Stats)

Euromoney country risk banner
 
All material subject to strictly enforced copyright laws.
© 2017 Euromoney Institutional Investor PLC.