In its latest forecast the European Commission predicts that Belgium’s budget will be 4.4% in the red by the end of this year. If current policy decision remain unadjusted Belgium’s budget deficit will rise to 4.7% next year. The European Commission also forecasts that Belgium’s public debt rises will be 105.0% of GDP this year rising to 106.6% of GDP in 2025.
European Commission predicts that Belgium’s budget deficit will rise to 4.7% by the end of 2025
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In March the Budgetary Monitoring Committee confirmed that that Belgium had ended 2023 with a budget deficit of 4.4%. Now, despite the complete phasing out of support measures taken during the energy crisis, the European Commission says that the deficit will remain at the same level in 2024.
Structural rises in current expenditure (in particular to pay for pensions) and higher interest rates on government debt are cited as the main culprits.
The European Commission's forecast of a 4.7% deficit in 2025 is slightly lower than the Monitoring Committee’s forecast of a 4.8% deficit in 2025.
High debt ratio
The debt ratio stood at 105.2% of GDP at end of last year and is forecast to fall slightly to 105.0% this year. This is largely the result of the 1-year government bond that was issued last summer. However, the rising fiscal deficit threatens to push the debt ratio up to 106.7% of GDP in 2025. These figures put Belgium well above the Maastricht Norm that requires EU countries to limit their deficit to 3% of GDP and keep their debt ratio to a maximum of 60%.
After several years relaxing the rules the European Commission want countries to get back on track again.