(Last updated: 10 May 2012)

Current business situation

The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Belgium. This is regularly updated, and should be checked before planning travel.

Country facts

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

The European Council and the European Commission are based in Brussels and their presence ensures that the title of ‘the capital of Europe’ is bestowed on the city. The North Atlantic Treaty Organisation (NATO) also has its headquarters here, as do hundreds of multinationals. Due to its location, Belgium sits in a zone where 60 per cent of Europe’s purchasing power and 30 per cent of EU consumers are concentrated; practically speaking, this means access to 140 million consumers within a radius of 450km.

The Belgian economy initially weathered the global financial crisis well, though the banking sector was severely affected in 2008-09 with three banks receiving capital injections from the Government. Following this, GDP contracting by 2.7 per cent and the unemployment rate rising slightly. In 2010, Belgium’s budget deficit widened to 4.8 per cent while public debt was just over 100 per cent.

The Economist Intelligence Unit (EIU) forecasts economic growth of two per cent in 2010 and 1.2 per cent in 2011. The Belgian government is committed to continuing the implementation of the economic stimulus package introduced in 2009, although some elements of it may be reconsidered. The instability in the government has made some investors nervous about the national position as borrowing costs continue to rise as public debt increases.

(Source: Datamonitor and Economist Intelligence Unit)

For the latest key economic indicators and statistics please see the Department of Foreign Affairs and Trade country economic fact sheet.

Political climate

Belgium was founded in 1831, and is a constitutional, hereditary monarchy. Since 1993 the Head of State has been King Albert II. Parliament is elected for a maximum four-year term.

Belgium is divided into three regional government areas (Flanders, Wallonia and the Brussels Capital Region) and economic power is granted to these three regional governments. The regions have jurisdiction over a wide range of policy areas, including economic transport, public works and industrial policy.

Education and other 'cultural issues' are devolved to three community councils that have similar levels of authority to regional governments. These are divided along linguistic, not geographic, lines representing the Dutch, French and German speaking peoples.

Belgium has not had a federal government since their last election in June 2010. Negotiations to form a coalition government are ongoing but a resolution is proving difficult to reach as the division between the French and the Dutch becomes more present (the country is divided into two distinct groups; 6 million Dutch-speaking Flemings against 4.5 million French speakers). The country’s leaders have been in discussion over serious constitutional reform since June last year. While the reforms are long overdue, they continually run into deadlock as policy makers attempt to keep two different groups happy when their interests are seemingly diametrically opposed.

Most are demanding a constitution which reflects the increasingly divided nature of the country; however it is unlikely that the poorer Francophone region is wholly accepting of this division; as a loss of financial solidarity could be detrimental.

Financial analysts are increasingly concerned by Belgium’s large public debt-to-GDP ratio (the third largest in the region). The King has, however, tasked the caretaker government with the goal of introducing special measures to protect the economic stability of the country for some time to come.

Trade relations and statistics

Please see the Department of Foreign Affairs and Trade country economic fact sheet for key trade statistics.