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Country Forecast Belgium

  • ID: 2138631
  • Country Profile
  • September 2016
  • Region: Belgium
  • 47 Pages
  • The Economist Intelligence Unit
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Background: Belgium has been an independent kingdom since 1830. It was a founding member of NATO (in 1949) and of what is now the EU. Belgium is home to the headquarters of NATO and the European Commission and Council, and the European Parliament has its second seat there. The country has two major language groups: the Flemish, who speak Dutch, and the francophones, who are dominant in Wallonia and Brussels; there is also a small German-speaking population.

Political structure: Belgium is a constitutional monarchy and a federal state, which is divided into three regions (Flanders, Wallonia and Brussels-Capital) and for education and culture into three "communities" (the Dutch, French and German language groups). The regions and communities have their own parliaments and executives, and power is increasingly being devolved to them. Regional elections take place every five years, with the next due in May 2019. At federal level, the Senate (the upper house of parliament) and the Chamber of Representatives (the lower house) have five-year terms that coincide with those of the regional parliaments. Elections to the Chamber (150 members) are by proportional representation. The last general election was held in May 2014 and a new government took office in October 2014. Below the regional level, provincial and municipal elections are held every six years, with the next due in 2018.

Policy issues: The policy agenda is dominated by two sets of issues: relations between the two main linguistic communities, and the distribution of powers between the federal and regional levels; and economic issues, including encouraging growth, improving competitiveness, and reducing public debt and the budget deficit. (Public debt is expected to remain at around 105% of GDP by the end of The Economist Intelligence Unit's forecast period.)
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Country Forecast Belgium

Belgium--highlights: Political outlook

Belgium--highlights: Demographic outlook

Belgium--highlights: Business environment outlook

Belgium--highlights: Economic outlook

Belgium--highlights: Market opportunities

Belgium--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance

Political outlook: Political stability

Political outlook: Political and institutional effectiveness

Political outlook: Election watch

Political outlook: Key players to watch
King Philippe
Charles Michel
Bart De Wever
Elio Di Rupo

Political outlook: International relations

Demographic assumptions
Net immigration will continue to drive population growth
Ageing population will impose costs

Business environment outlook: Business environment rankings
Impact of the government's liberalising agenda will be modest and gradual

Business environment outlook: Belgium's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
The labour market

Business environment outlook: Macroeconomic environment
Structural flaws in the institutional framework of the euro zone will persist

Business environment outlook: Policy towards private enterprise and competition

Business environment outlook: Policy towards foreign investment
The government will remain broadly receptive to inflows of foreign capital
Tax advantages for multinationals will be cut back under Commission pressure

Business environment outlook: Foreign trade and exchange controls
UK vote to leave the EU will harm UK-Belgian trade and investment links

Business environment outlook: Taxes
Reforms aim to reduce the labour-tax burden and boost indirect tax revenue

Business environment outlook: Financing
Credit conditions will remain subdued in a challenging financial environment

Business environment outlook: The labour market
Low employment and high labour tax burden hinder competitiveness

Business environment outlook: Infrastructure
Belgium will continue to have well-developed infrastructure
Nuclear phase-out poses electricity supply risks

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends
The automotive industry will suffer from the weakness of domestic demand

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Belgium
Stocks and flows
Origin and distribution

Market opportunities: Market outlook
Belgium benefits from its geographical position, but growth will remain slow

Market opportunities: Consumer expenditure
The current strong expansion in e-commerce should continue

Market opportunities: Social indicators and living standards

Long-term outlook: The long-term outlook
Population growth will remain positive, owing primarily to net immigration
Long-term GDP growth will depend on productivity improvements

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data sources and definitions
Global data
Domestic data

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model
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