A report published last week by the National Bank of Belgium (BNB) has found that the Brussels-Capital Region is the only region in the country to generate an average trade surplus, at €28.6 billion.
A large chunk of cash flow leaves the capital, however, with €20 billion paid in wages to commuters who live in Flanders and Wallonia.
The study, entitled 'Regional flows and (in)equalities in Belgium', covers a period from 2010 to 2021 and analyses three components of GDP at regional level (production, spending and revenue) for the first time.
It also offers the first "coherent, detailed, and integrated reading of economic balances at the sub-national level", the BNB explains in its conclusions.
Both Brussels and Flanders generate enough revenue to cover their spending needs and are net contributors to the country's economy, while Wallonia suffers from a "structural deficit".
New data upends old suppositions
"This new data completely subverts what we thought until now", economist Cédric Duprez, one of the co-authors of the study, explained to Le Soir. "Until now, transfers from Brussels to other regions were estimated at €1 billion to €1.5 billion. Our study shows that they are actually two to three times higher."
Brussels, the BNB points out, is "home to a significant number of banks, insurers and international financial institutions, giving it a pivotal role in financial services in Belgium and beyond".
According to the study, €3 billion a year leaves the capital region as part of the country's 'solidarity mechanism', with Flanders contributing €4.2 billion.
While Flanders has an average yearly trade deficit of €4.9 billion, that figure is offset by a net income of €14.6 billion from wages, allowing the region to sustain its spending while maintaining a positive balance.
Wallonia's trade deficit, meanwhile, amounts to a yearly average of €19.9 billion, due to what the BNB describes as "a weaker level of production than the two other regions". This deficit is counterbalanced by €7.3 billion in inter-regional transfers, as well as a flow of income brought in by commuters averaging at €12.1 billion.
According to the report, Brussels has an income which is equivalent to 33% less than its GDP. Flanders, meanwhile, recorded average revenue figures which were 4% higher than its GDP, with the number south of the language border rising to a 15% increase.
In the report, the National Bank also analyses a hypothetical scenario in which each region would be entirely responsible for financing its own spending.
Taking the €7 billion a year in transfers between regions out of the equation, the Brussels-Capital Region would record a surplus, Flanders would have a smaller deficit, while Wallonia would be unable to sustain its public spending without transfers from the other two regions.
The BNB has underlined that the report aims to provide a “rigorous statistical analysis" of a subject which is often spoken about from a “political and ideological” angle.
The results, it concludes, "reveal deep and structural regional imbalances, marked by massive flows – which are often invisible in national statistics – of income and transfers between regions".
