Cultural Diversity and Economic Performance in Belgium - Essay Example

Cultural Diversity and Economic Performance in Belgium Belgium Economy The recession that started in 2005 has a significant and lasting effect on the economic situation of the world in 2002 and 2010 the recessions also continue to have significant repercussions in the years that followed (Bellini and Ottaviano et al., 2013, pp. 121--141). However, the chances of the economy of the world and Belgium recovering are perceptible. The global recession also brought some impact on the Eurozone. In 2011, the growth of the economy in the Eurozone slowed down to the gross domestic product of the country shrunk by 0.3 % 12 2012. This was slightly lower that the fall that was recorded in the Eurozone area (Bellini and Ottaviano et al., 2013, pp. 121--141). The projections for the year were indicative that the year 2013 would be the possible year of recovery for the region. This recovery would have a significant effect on the development of new jobs and reduction of inflation. However, the projections made for the year also indicates that there will be a new form of uncertainty that would affect the Belgian economy. The GDP of the area would grow in a significant manner despite the fall in the rate of development that was manifested in the Eurozone where the gross domestic product for the Eurozone went down by 0.2 percent. Despite the performance of the peripheral economies such as Nederland's and France that are the main trading partners for Belgium the economy in 2013 indicated a significant inclination for growth (Bellini and Ottaviano et al., 2013, pp. 121--141). In the normal circumstances, the economy of the employment sector takes a lot of time so that it can recover. The cyclical downturn that manifested itself in the middle of 2012 and the gloomy outlook on the economy in 2013 has the implication on the employment sector being a slow growth in the rate of employment (Bellini and Ottaviano et al., 2013, pp. 121--141). The downturn of 2012 was a major blow to the prospects of employment. This downturn meant that the people could not have the right employment since the economy is still struggling. The slow growth in the economy manifested in the areas will not be significant to cover the growth of the employment needs of the people. This means that the rate of real unemployment will remain in the regions that are has been playing at. In fact, the unemployment rates may go higher with the slow development of the economy and the general fall in the levels of production in the major trading partners. The poor performance of the Netherlands and France means that the economy will not be able to be in a position of benefiting from the usual ripple effects of having a strong economy. The outlooks made in the employment sector will be more or less the same in the year. The anti-crisis employment schemes that were created in the global financial crisis era are slowly ending. The people are not allowed to access them as they were in the past (Bellini and Ottaviano et al., 2013, pp. 121--141). This makes the economic projections for the labour market to be even gloomier. The government is no longer making policies that are meant to reduce the rate of unemployment. The dwindling anti-crisis reserves have led to the change in the changes of the employment prospects for the nation. This means that the general rate of real unemployment in the country will keep on improving despite the positive projections made on the performance of the economy in 2014. The projections for the consumer price inflation have been estimated to stay at 1 per cent. This estimate that is lower than the 1.4 percent is found in the entire membership of the Eurozone. The projections for the inflation of the country in 2014 are 1.2. The projections for the year 2012 were made at 2 percent, but they later exceeded the projected amount by 0.6per cent. The reason for the irregularity in the projections and the real issue on the ground is that the area was mainly undergoing a downturn in 2012. The effects of the cyclical downturn that affected the countries in the Eurozone also reached Belgium that had been able to weather the effects of inflation on its own compared to the other players in the Eurozone (Bellini and Ottaviano et al., 2013, pp. 121--141). The decrease in the level of inflation, in the country is mainly because of the decrease in the energy prices. During 2012, the energy prices in the area were rising at a steady rate of six percent. However, in 2013, the energy prices had stabilized and there was no rapid growth in the energy prices. The fall in energy prices was mainly because of the constant strengthening of the euro against the dollar. The fall in the international prices of petroleum products has also had a significant impact on the decline in the rate of oil prices and the inflation rates in Belgium (Bellini and Ottaviano et al., 2013, pp. 121--141). The development of new gas reserves and electricity has also led to the affordability of the oil. The companies have factored in the decrease in the oil prices in the cost of their products. The unprocessed foods have always been rising. The rise in this important food commodity has had a significant effect on the gradual development of the favourable consumer environment in Belgium. The rise in the prices of food products has resulted in the general rise in the prices of the commodities in the country, which has countered the developments, made in the energy sector. The reasons for the rise in the prices of unprocessed food are linked such aspects as bad local weather, which have led to major inconveniences in the supply of the foods. There are increases in the indirect taxes in 2012 that have led to the increase in the underlying inflation rates (Bellini and Ottaviano et al., 2013, pp. 121--141). The area that was largely affected by the indirect taxes was communications sector. The taxes in the communication sector led to an increase in the overall cost of living, albeit in a slight manner to the consumer. However, when the taxes are aggregated, the costs of living for the entire population witnessed an increase. However, despite the obvious areas of the economy that have witnessed increases in the prices such as the prices of the foods and the communication, the inflation level for Belgium has been decreasing compared to the inflation level in the rest of the Eurozone. References Bellini, E., Ottaviano, G. I., Pinelli, D. and Prarolo, G. 2013. Cultural diversity and economic performance: evidence from European regions. Springer, pp. 121--141. Read More