Thanks to a relatively good first quarter, the European Commission's economic forecasts for inflation and growth in Belgium this year are slightly better than was the case three months ago. However, this is not the case for next year with the European Commission forecasting a budget deficit well in excess of 3% for 2024.
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European Commission revises up growth forecast for Belgium
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In February the European Commission predicted economic growth in Belgium would be 0.8% of GDP. In the last forecast that was released during a press conference on Monday this has been revised up to 1.2%. While the forecast for growth has been revised up, the forecast for inflation has been revised down. In February the European Commission forecast that at the end of this year the annual inflation rate in Belgium would be 4.3%. The latest forecast predicts an inflation rate of 3.4% at the end of the year.
Less optimistic forecast for 2024
The Commission’s latest forecasts for inflation and growth in 2024 are less optimistic than was the case in February. Economic growth in 2024 is now forecast to be 1.4% of GDP (down from a forecast of 1.6% in February). Meanwhile, inflation in Belgium in 2024 is now forecast to be 3.5% rather than the 2.7% inflation rate forecast by the European Commission in February.
Meanwhile, the budget deficit remains a major issue in Belgium. For this year the European Commission forecasts that Belgium will have a budget deficit of 5% (compared with 3.9% in 2022). The forecast for next year predicts only a modest fall to 4.7%.
As regards public debt, the forecast for Belgium for this year is 106.0%. In the EU only Greece (160.2%), Italy (140.4%), Spain (110.6%), France (109.6%) and Portugal (106.2%) have higher debt ratios.