Belgium's Economy: World's 20th Freest Economy

Pages: 4 (1144 words) Published: May 21, 2009

Belgium's economy is 71.5 per cent free, according to our 2008 assessment, which makes it the world's 20th freest economy. This is a 0.9 percentage point decrease from last year, primarily reflecting increased government spending. Belgium is ranked 10th freest among the 41 countries in the European region, and its overall score is above the regional average. Belgium scores very high in investment freedom, property rights, monetary freedom, and business freedom and is above the world average in eight areas. A member of the European Union, it has a standardized monetary policy and relatively low inflation despite some government distortion in the agricultural sector. Its transparent rule of law protects property and encourages confidence among foreign investors. Belgium's extensive welfare state is supported by exceptionally high government spending and income tax rates. Overall tax revenue is an uncommonly high per cent of GDP, and Belgium's government size score is 50 percentage points worse than the world average. Background

Belgium 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 sought to ease the income tax burden and succeeded in balancing the budget, but growth remained sluggish. Christian Democratic leader 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

Rank: 20
Regional Rank: 10 of 41

Population:10.5 million
GDP (PPP):$336.6 billion
1.5% growth in 2004
1.7% 5-yr. comp. ann. growth
$32,119 per capita
Unemployment: 8.4%
Inflation (CPI):...
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