Belgium Economy

? Belgiums deliverance is 71. 5 per cent free, according to our 2008 assessment, which makes it the worlds 20th freest economy. This is a 0. 9 percentage point decrease from nett year, primarily reflecting increased government spending. Belgium is ranked 10th freest among the 41 countries in the European region, and its overall tick off is above the regional average. Belgium ranges real high in investment freedom, berth rights, monetary freedom, and short letter freedom and is above the world average in octette areas.A member of the European Union, it has a standardized monetary policy and relatively low inflation despite some government aberration in the agricultural sector. Its transparent rule of law protects belongings and encourages confidence among foreign investors. Belgiums extensive upbeat state is supported by exceptionally high government spending and income task grazes. Overall value revenue is an uncommonly high per cent of gross national product, and Belg iums government size score is 50 percentage points worse than the world average. BackgroundBelgium is a federal state consisting of three economically different regions Flanders, Wallonia, and the capital city of Brussels, which houses the headquarters of NATO and the EU and has been at the forefront in driving the supranationalisation of power within the EU. After eight years, Guy Verhofstadt and his Liberal Party were ousted from power in 2007. His previous Socialist Liberal coalition desire to ease the income tax burden and succeeded in balancing the budget, scarce growth remained sluggish. Christian Democratic attracter Yves Leterme has since been invited to form a coalition government.Services account for around three-quarters of GDP. The leading exports are electrical equipment, vehicles, diamonds, and chemicals. BELGIUM mark 20 Regional Rank 10 of 41 Population10. 5 one thousand million GDP (PPP)$336. 6 zillion 1. 5% growth in 2004 1. 7% 5-yr. comp. ann. growth $32,11 9 per capita Unemployment 8. 4% Inflation (CPI) 2. 5% FDI (net inflow)$766 million Off. Dev. Assist. None External Debt $1. 1 trillion Exports $318. 8 billion Primarily machinery and equipment, chemicals, diamonds, metals and metal products, foodstuffs. Imports $308. 4 billionPrimarily machinery and equipment, chemicals, diamonds, pharmaceuticals, foodstuffs, transportation equipment, oil products. BELGIUMS TEN ECONOMIC FREEDOM Business freedom 93. 7% The overall freedom to start, operate, and close a demarcation is strongly protected by Belgiums national regulatory environment. Starting a business takes an average of four days, compared to the world average of 43 days. Obtaining a business license requires less than the world average of 19 procedures and 234 days. Regulation is transparent, and the laws are enforced effectively. Closing a business is easy and straightforward. Trade freedom 86%Belgiums trade policy is the same as those of another(prenominal) members of the Europ ean Union. The common EU weighted average tariff rate was 2 per cent in 2005. Non-tariff barriers reflected in EU policy include agricultural and manufacturing subsidies, import restrictions for some goods and services, market access restrictions in some service sectors, non-transparent and restrictive regulations and standards, and inconsistent customs administration across EU members. Enforcement of intellectual billet rights remains problematic. Consequently, an additional 10 percentage points is deducted from Belgiums trade freedom score.Fiscal freedom 43. 9% Belgiums income tax rate is one of the worlds highest, and its corporate tax rate is also high. The top income tax rate is 50 per cent, and the top corporate tax rate is 34 per cent (a 33 per cent tax rate and 3 per cent surcharge). Other taxes include a value-added tax (VAT), a transport tax, and a property tax. In the close to recent year, overall tax revenue as a percentage of GDP was 44. 9 per cent. Freedom from Gove rnment 17. 9% Total government expenditures, including consumption and transfer payments, are very high. In the most recent year, government spending equaled 52. 3 per cent of GDP.Monetary freedom 80. 4% Belgium is a member of the euro zone. Between 2004 and 2006, its weighted average annual rate of inflation was 2. 3 per cent. comparatively stable prices explain most of the monetary freedom score. As a participant in the EUs habitual Agricultural Policy, the government subsidies agricultural production, distorting the prices of agricultural products. Price-control policies affect water supply, waste handling, homes for the elderly, medicines and implantable medical devices, certain cars, supreme insurance, fire insurance, petroleum products, cable television, and certain types of bread.An additional 10 percentage points is deducted from Belgiums monetary freedom score to account for these policies. Investment freedom 90% Most restrictions on foreign investment also have to do mestic investment. Permits and licenses required for certain industries are not hard to obtain. Regional and national incentives are broadly speaking open to foreigners and Belgians, but taxes and certain employment criteria are federally controlled. Performance requirements, when present, are linked to crease creation. EU regulations require some restrictions on non-EU investment in public works.There are no restrictions on the purchase of real estate, residents and non-residents accounts, repatriation of profit, or transfer of capital. Financial freedom 80% Belgium has one of the worlds most developed financial systems, with 104 banks, including over 70 foreign banks, and numerous financial service providers, but the volt largest banks still hold 85 per cent of deposits. An independent commission supervises the financial sector. Banks must provide a minimum set of services. Credit is allocated at market terms to both foreign nd domestic investors. Belgian law differentiates be tween EU and non-EU banks, financial institutions, and insurance companies, although firms from European Economic Area or World Trade Organization countries may be treated equally. Regional authorities may subsidies medium- and long borrowing. The insurance sector is smaller and less robust than banking. The worlds first stock market was organized in Antwerp, and Belgiums sound capital markets were recently integrated into Euro next, a broader European sub.Property rights 80% Property is hearty protected, and contracts are secure. The laws are codified, and the judiciary and civil service, while often slow, are of high quality. Intellectual property rights are well protected, but implementation of relevant EU directives has been slow. Freedom from corruption 73% rot is perceived as minimal. Belgium ranks 20th out of 163 countries in Transparency Internationals Corruption Perceptions Index for 2006.Belgium outlaws both lively bribery and passive bribery, whereby an official re quests or accepts a benefit for himself or somebody else in exchange for certain behavior. Labor freedom 69. 9% Employment regulations are relatively flexible, but further tame is needed to foster employment creation and productivity growth. The non-salary cost of employing a worker can be very high, and dismissing a redundant employee is relatively costly. Belgiums high labor costs are sustainable for high-value-added processes, but market rigidities remain a considerable barrier to employing a worker.