Belgian economy: A force to reckon with.

Diamonds, lace, chocolates, glass, carpets! These are some of the best known products from Belgium that have a worldwide market. This small European nation has enriched itself by virtue of its high quality and specialized products, and services.

The country enjoys a central position, as it were, in Europe, and has taken full advantage of it. It has developed a world class transport system, and other infrastructural facilities like ports, and harbors that contribute immensely to the country’s economy.

The major contributors to the Belgian economy and its well-being are services, especially transportation, trade, industry, and commerce. Agriculture contributes only 1% to the GDP, while services contribute 75%. While agriculture provides work to 2% of the workforce, services provide 73% of the jobs to the workforce.

The GDP growth rate of the country for this fiscal is projected to be 1%, while industrial growth is expected to be 2%. The unemployment rate is around 7%, and inflation about 5%.

The major exports of Belgium are transportation equipment, diamonds, chemicals, metals, foodstuffs, etc., and the major imports are rough diamonds, pharmaceuticals, chemicals, etc. Among the major industries are engineering, vehicle assembly, processed foods, chemicals, textiles, glass, chocolates, etc. Belgium’s major trading partners are other E.U. members, accounting for 75% of the trade.

The major problem facing Belgium is the high public debt which is anywhere between 75% to 80% of the GDP. In the year 1993, it was said to be 137% of the GDP, hence there is some improvement in this area of economic management. Public debt management is one area where Belgium is found wanting, and needs to overcome.

If Belgium can overcome the public debt problem, it can rightfully become a model economy for other countries, especially those that do not have a natural resources base, and have to depend upon their own talents and capabilities to build up a network of economic activities, that ensure a safe and durable livelihood to its people.

Denmark economy: Smooth sailing.

Denmark is one of the few European countries not affected much by the global crisis, and has registered consistent economic growth over the years.

Of course, the small size of the country, both in geographical terms, as well as population size, means fewer problems and lesser complications. Nevertheless, the Danish Government deserves credit for creating the right climate for economic development, that has made it one of the most favored destinations for foreign investors.

Denmark is a highly developed economy, with a sophisticated industrial base, and exports machinery, instruments, food products, furniture, chemical products, windmills, toys, etc. The country imports raw materials, capital equipment, transport equipment, consumer goods, etc.

The inflation rate of the country is around 1.2%, and the unemployment rate is about 3.7%. The country was recently voted as among the least corrupt countries in the world.

Of course, it is not rosy all the way. There are a few problems, which, if not attended to promptly, may blow up into major issues. For instance, the Danish Banking industry has been capitalized by the Government to the tune of USD 350.00 million. And the country has a negative growth rate of 4.3%.

However, the excellent social safety net of the Government provides adequate support to its citizens. And this safety is also provided at a high cost to its citizens, in the form of income and other taxes.

Presently, the country is a bit isolated in the European Union, as it has not formally joined the Eurozone economies. This is going to have its own impact on the Danish economy, among other things, as being isolated within its own environment may cost dear to the country.

Romanian economy in the grip of an economic Dracula.

Romania may be in the grip of an economic Dracula, that is sucking out the blood from it, and leading to its painful demise, as it were.

According to the country’s Finance Minister, the economy is likely to contract by 8.4% to 8.5% in 2009. This matches up with the forecasts of the IMF that has extended an economic lifeline to the country. However, if things do not improve fast, this lifeline could end up as a noose around Romania’s neck.

Among the problems that Romania is now facing is a possible sovereign bankrupty, for want of funds to run the state and its institutions. Whichever facet of the economy one looks at, reveals a negative factor. Unemployment is rising by the day. Stock values are falling without a check. Investors are bleeding non-stop. Public debt is mounting without an end in sight. Trade deficit is on the rise. The real estate sector is reeling from the effects of the economic mess. Businesses are folding up and even the Banking industry is yelling for help from the Government.

In the scenario obtaining in Romania today, it was inevitable that IMF enter the scene, with all its conditions to bail out the economy, with a generous dose of money. But the fact is that, the major part of this money is going into shoring up the national currency that has been battered in the market, and the financing of the trade deficit. As Romania gets deeper into economic trouble, the IMF gets a tighter hold over its economy and system, enabling it to dictate terms that are likely to cause hardship to common Romanians, without a correspondingly beneficial fallout of these measures, as history has shown.

Only time will tell how this unfolding crisis is going to pan out in Romania, and how it is going to affect the rest of the world.

Italy, a long way to go before recovery.

A country full of beautiful and scenic spots, Italy is in the throes of a economic crisis that appears just about to loosen its stranglehold on the country. The reason for this bit of optimism is the same as in the case of several other countries-that the economic contraction in the second half of fiscal 2009 is lesser compared to the earlier quarters!

One of the major reasons affecting the Italian economy, even otherwise, even before the recession, was slow economic growth on account of various regulatory issues, public administration issues, etc. Italy has recorded poorer growth compared to other eurozone and OECD states.

The financial system in Italy has not suffered as much as in other western countries, mainly because of the prudent principles adopted in credit and investment. That apart, the public debt of Italian Banks is said to be of a lower level.

However, interbank markets are beset with problems of liquidity, and the Governemnt, along with the Central European Bank had to intervene to smoothen out things to ensure proper functioning of the system.

A combination of the global crisis and certain outdated laws in relation to labor issues, the legal system, tax structure, etc., may compound Italy’s economic problems and delay the much needed recovery, that is bleeding the country and its institutions.

Political instability has always been the background of anything Italian, and it has compounded the economic crisis, on account of lack of consensus, and contrary policies.

The grave situation now prevailing in Italy may compel the Government to act fast and judiciously, to tackle the problem. And if the Italians can get their economic act together, they may come out of the crisis faster than expected. It depends upon their resolve.