Despite a slight breach of the agreed spending limit in 2025, the European Commission says that Belgium’s federal budget remains “on track”.
In an assessment of the 2026 draft budget that was released on Thursday, the European Commission said that while expenditure in 2025 grew by slightly more than the 3.6% growth ceiling set for Eurozone countries, it falls within the flexibility allowed under the national escape clause that grants extra room to take into account additional spending on defence.
This year net expenditure growth is forecast at 1.9%. This is well below the 2.5% ceiling.
Belgium is currently subject to the measures contained in the European Union’s excessive deficit procedure that was launched in the summer of 2024. 8 other EU member states whose budget deficits and public debt exceed treaty thresholds are also subject to the measures contained in the excessive deficit procedure.
In its assessment of this year’s federal budget, the European Commission takes account of the VAT reform proposed by the federal government. However, planned VAT rises on tickets cultural events, sport and takeaway food have been scrapped for the time being at least. This leave a hole of at least 400 million euro. The Belgian Prime Minister Bart De Wever’s (Flemish nationalist) government has pledged to offset the shortfall through other measures.
On the wider economy, the European Commission broadly agrees with the federal government’s projections. It expects real GDP to grow by 1.1% this year. At 2% the European Commission’s inflation forecast is slightly higher than the forecast from the Federal Planning Bureau.