An economic forecast published by the Federal Planning Bureau on Wednesday says that the measures that have been taken by the Federal Government so far will not enable it to achieve its budgetary goals. The forecast covers the period from 2025 to 2030. It predicts that the budget deficit will rise slightly this year to 5.4% of GDP, after which it will remain stable before rising to 6.2% of GDP in 2029 and 6.5% in 2030.
Federal Planning Bureau says that measures taken so far not sufficient to get the federal budget back on track
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The Federal Planning Bureau concludes that "With the decisions that have been taken the budgetary goals will not be attained”.
This year the budget deficit will increase to 5.4% of GDP. This is worse than the 5.2% of GDP that had been forecast by the National Bank of Belgium. According to the Planning Bureau the rise in the budget deficit is above all due to an increase in social expenditure and the decision to immediately increase defence spending to NATO’s norm of 2% of GDP. During the 3 years that follow the budget deficit will remain more or less stable.
However, for 2029 the Federal Planning Bureau forecasts that the budget deficit will rise to 6.2% of GDP, rising further to 6.5% in 2030. It says that this will be a result of plans to reduce income tax and higher interest rates.
The forecast comes despite the federal government’s believe that its policies will result in a fall in public debt. However, the Federal Prime Minister Bart De Wever (Flemish nationalist) has said in the past that the impact of his government’s reforms will only be felt in the long term and that it will take 10 years to get Belgium’s budgetary house in order.
The Federal Planning Bureau also forecasts that by 2030 around 263,000 more people will be in work in Belgium than is currently the case. Of these one third will be aged 65 or older.
The employment rate is forecast to rise from 72.3% now to 74.7% in 2030. This figure does not include people aged 65 and older. The increase in the employment rate will be above all due to more older people working than is currently the case. This will be encouraged by planned reform to pensions and the labour market.