Feeling the effects of being globally connected, Belgium’s economy and exchange traded fund (ETF) have stumbled under a prolonged period of global financial troubles and stagnant partner countries.

The International Monetary Fund (IMF) calculates Belgium’s economy to contract 2.5% this year and recover a small 0.3% next year, according to Forbes. The IMF advised a structural adjustment of 0.7% of GDP once the current crisis abates.

The government’s planned economic stimulus package, although smaller than previously planned, will cause the public-sector deficit to grow. IMF estimates the deficit will rise to 3.4% of GDP in 2009 and 4.5% in 2010. Belgium already spent $25 billion bailing out its financial sector, and the government may not be able to provide another fiscal stimulus.

Belgium Central Bank announced the consumer confidence index was stable in March with signs of less pessimism toward economy and labor market prospects, as stated by Forbes. But consumer sentiments worsened in regard to household finances and the ability to save.

The European Commission is allowing Belgium to support Flemish companies by setting up subsidized guarantees for investment and working capital loans, reports Carolyn Henson for The Wall Street Journal.

• iShares Belgium Investable Market Index (EWK): up 4.7% in the last month; down 8% year-to-date

Max Chen contributed to this article.

Tags: Belgium, Emerging Markets, Europe, EWK, Global ETFs