Economy of Belgium

Overview

Belgium is among the 10 largest trading nations of the world with a GDP of EUR 288.09 billion in 2004. The Economy of Belgium greatly capitalizes on its strategic geographic location on the heart of the European continent. Belgium is a member of the Organization for Economic Cooperation and Development (OECD) and a highly developed market economy. The economy of Belgium is heavily dependant on foreign trade with its European neighboring nations. About three-quarters of the produce in Belgium are exported to the European Union countries.

Belgium's highly developed transportation infrastructure of ports, canals, railways, and highways further augment the country's economy.

Major Sectors in Belgium

In spite of a strong industrial sector in Belgium, it is the services sector which accounts for nearly 75% of the country's GDP, while the industrial sector accounts for 27% of the country's GDP. The agricultural sector contributes only 1.04% of GDP with animal breeding and dairy production being the primary agricultural activities.

The major industries in Belgium are engineering, metal products, motor vehicle assembly, chemicals and basic metals, petroleum, processed food and beverages, textiles and glass. The industrial sector in Belgium imports raw materials and semi-finished goods which are further processed and made ready for re-export. Industries in Belgium are mostly concentrated in the Flemish area in the north.

The services sector is slowly gaining momentum with nearly 75% of the workforce employed in the services sector, while the industrial sector employed fewer than 25%. Agriculture accounts for the lowest percentage of employment with only 1% of the workforce under its belt. It is to be noted that in spite of the decline in the GDP of industry, it still accounts for 80% of the exports in Belgium.

Foreign Trade and Investments

Due to the dearth of natural resources, Belgium is hugely dependant on foreign trade and investments. As an open economy, Belgium is one of the favored destinations in the world, for foreign investments. The three major investors in Belgium are France, Luxemburg and the Netherlands.

In terms of foreign exports, Belgium is the largest exporter in the world and almost 80% of the country's trade is done with its EC member states. Belgium's major export partners are United Kingdom, Germany, Netherlands, Italy and the United States. Belgium is the number one exporter of diamonds and carpets in the world. Besides these, the other major goods exported are plant fibers, chocolate margarine, vehicles, pharmaceutical products, machinery and organic chemicals.

In terms of imports in Belgium, the major partners are Germany, Netherlands, France, United Kingdom, United States and Ireland and the chief products imported are chemicals and pharmaceutical products, mineral fuels & oils, vehicles, and machinery.