Belgium Economy

? Belgiums economy is 71. 5 per cent free, agree to our 2008 assessment, which makes it the worlds twentieth freest economy. This is a 0. 9 percentage point decrease from decease year, primarily reflecting increased governing spending. Belgium is ranked 10th freest among the 41 countries in the European region, and its general score is above the regional average. Belgium scores genuinely utmoster(prenominal) in investment immunity, property rights, monetary exemption, and business immunity and is above the world average in eight areas.A penis of the European Union, it has a standardized monetary policy and relatively humiliated flash despite more or less establishment distortion in the countrified sector. Its transparent rule of law protects property and encourages confidence among foreign investors. Belgiums commodious welfare state is supported by exceptionally high disposal spending and income appraise rolls. Overall tax revenue is an uncommonly high per cent of gross domestic help product, and Belgiums 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 head teacher in driving the supranationalisation of power within the EU. After eight years, computerized axial tomography Verhofstadt and his spacious 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, alone suppuration roosted 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 galvanic equipment, vehicles, diamonds, and chemicals. BELGIUM Rank 20 regional Rank 10 of 41 universe of discourse10. 5 one thousand thousand GDP (PPP)$336. 6 billion 1. 5% growth in 2004 1. 7% 5-yr. comp. ann. growth $32,119 per capita Un participation 8. 4% Inflation (CPI) 2. 5% FDI (net inflow)$766 million Off. Dev. Assist. None External Debt $1. 1 trillion Exports $318. 8 billion in the first place 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 granting immunity 93. 7% The overall freedom to start, operate, and close a business is strongly protected by Belgiums national regulatory environment. Starting a business takes an average of quadruple days, compared to the world average of 43 days. Obtaining a business license requires little than the world average of 19 procedures and 234 days. Regulation is transparent, and the laws are enforced effectively. gag rule a business is easy and straigh tforward. Trade freedom 86%Belgiums business policy is the same as those of other members of the European 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, trade access restrictions in some service sectors, non-transparent and restrictive regulations and standards, and at odds(predicate) customs administration across EU members. Enforcement of intellectual property rights the Great Compromiser 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 bodied 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 most new-fashioned year, overall tax revenue as a percentage of GDP was 44. 9 per cent. Freedom from Government 17. 9% Total government expenditures, including spending and ship 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. Relatively stable prices explain most of the monetary freedom score. As a participant in the EUs Common 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(a) cars, compulsory indemnification, fire insurance, petroleum products, cable television, and certain types of bread.An additional 10 percentage points is deducted from Belgiums mone tary freedom score to account for these policies. Investment freedom 90% Most restrictions on foreign investment also dedicate to domestic investment. Permits and licenses required for certain industries are not hard to obtain. Regional and national incentives are generally open to foreigners and Belgians, but taxes and certain employment criteria are federally controlled. Performance requirements, when present, are linked to job creation. EU regulations require some restrictions on non-EU investment in public works. at that place 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 pecuniary systems, with 104 banks, including over 70 foreign banks, and numerous financial service providers, but the five largest banks still hold 85 per cent of deposits. An independent delegating supervises the financial sector. Banks must provide a minimum set of services. character reference is allocated at market terms to both foreign nd domestic investors. Belgian law differentiates between EU and non-EU banks, financial institutions, and insurance companies, although firms from European Economic Area or World Trade Organization countries whitethorn be treated equally. Regional authorities may subsidies medium- and long-term 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 exchange.Property rights 80% Property is well protected, and contracts are secure. The laws are codified, and the judiciary and civil service, while often slow, are of high quality. apt property rights are well protected, but implementation of relevant EU directives has been slow. Freedom from corruption 73% Corruption is perceived as minimal. Belgium ranks 20th out of 163 cou ntries in Transparency Internationals Corruption Perceptions Index for 2006.Belgium outlaws both mobile bribery and passive bribery, whereby an official requests 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 reform is demand to foster employment creation and productivity growth. The non-salary cost of employing a actor 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.