Belgium: country overview

22 May 2012
by Ina Dimireva -- last modified 30 May 2012

Belgium's modern, private-enterprise economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base.

Belgian flag

Year of EU entry: Founding member (1952)

Member of Schengen area:Yes

Political system: Constitutional monarchy

Capital city: Brussels

Total area: 30 528 km²

Population: 10.7 million

Currency: euro

Listen to the official EU languages: German, French , Dutch

Belgium map Belgium is a federal state divided into three regions: Dutch-speaking Flanders in the north, francophone Wallonia in the south and Brussels, the bilingual capital, where French and Dutch share official status. There is also a small German-speaking minority of some 70 000 in the eastern part of the country.

Economy overview

This modern, open, and private-enterprise-based economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north. With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to volatility in world markets. Roughly three-quarters of Belgium's trade is with other EU countries, and Belgium has benefited most from its proximity to Germany. In 2011 Belgian GDP grew by 2.0%, the unemployment rate decreased slightly to 7.7% from 8.3% the previous year, and the government reduced the budget deficit from a peak of 6% of GDP in 2009 to 4.2% in 2011. Despite the relative improvement in Belgium's budget deficit, public debt hovers near 100% of GDP, a factor that has contributed to investor perceptions that the country is increasingly vulnerable to spillover from the euro-zone crisis. Belgian banks were severely affected by the international financial crisis in 2008 with three major banks receiving capital injections from the government, and the nationalization of the Belgian arm of a Franco-Belgian bank. An ageing population and rising social expenditures are mid- to long-term challenges to public finances.

Source: CIA - The World Factbook