Belgium economic stimulus package falls within European Union’s economy package outlined at €200 billion. This allocated economic stimulus package in Belgium is equivalent to 1.5 percent of aggregated gross domestic product (GDP) of 27 member nations of European Union. Foreign direct investment and growth rate dropped in 2008 after a moderate growth phase from 2004 – 2007.
Subsequently, falling consumer expenditure, pessimistic investment environment and tightened credit facilities contributed to a decline in national income. GDP calculated with purchasing power parity (ppp) as basis was estimated at $398.7 billion in 2008 which when calculated at official exchange rate worked out to $530.6 billion. Such an environment makes an economic stimulus package for Belgium very necessary.
Real growth rate of GDP was estimated at 1.5 percent in 2008 whereas per capita GDP calculated on ppp terms was $38,300. Services sector with nearly 75 percent share was greatest contributor towards GDP, followed by industrial sector’s 24 percent and agricultural sector’s 1 percent. Implementation of economic stimulus package in Belgium has become even more important in view of Belgian economy’s shrinkage at a rate of 1.7 percent. Belgian economy stimulus package, if put in place, can bring down inflation to 1 percent in 2009 as compared to 4.6 percent in 2008.
Exports are likely to fall by about 4.5 percent and aggregate demand by 0.3 percent. An economic stimulus package of Belgium can prove to be handy in such an adverse economic scenario. A reduction is aggregate demand and exports would result in fall in work force thus demand raising unemployment level to more than 8 percent as compared to 2008’s 7.1 percent. Effects of such economic fallouts could be averted with help of an economic stimulus package to Belgium.
In 2008 budget, Belgian government had earned revenue of $251.3 billion and incurred expenses of $254.2 billion thereby yielding a deficit of $2.9 billion. Public debt calculated in 2008 worked out to almost 81 percent of GDP. Balance of payments reflected a negative figure against Belgium with exports amounting to $373 billion and imports $375 billion. As 80 percent of Belgium exports comprise of industrial products, a worldwide decline in demand for industrial commodities has adversely affected overseas trade of this European industrial economy. Belgium economy stimulus package has allowed for open participation of foreign investors in domestic investments, specially in infrastructural projects.
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