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Belgium's Finances Bleak: Worst in Europe, Says PM
25 Apr
Summary
- S&P downgraded Belgium's credit rating to AA- due to large budget deficits.
- Net government debt is projected to rise to 109% of GDP by 2029.
- Prime Minister acknowledged Belgium's fiscal failings as the worst in Europe.
S&P Global Ratings recently downgraded Belgium's credit score by one step to AA-, marking the second such reduction in a week. This action highlights Belgium's substantial fiscal challenges, including a widening budget deficit projected for 2025 and a slow consolidation plan for 2026-2029.
Analysts project Belgium's net government debt to climb to 109% of GDP by 2029, accompanied by increased interest payments. Prime Minister Bart De Wever acknowledged these fiscal failings, describing Belgium's public finances as the worst in Europe. The country's debt growth rate is also forecast to be the fastest among advanced economies, excluding the U.S.
Belgium remains under the EU's Excessive Deficit Procedure due to deficits exceeding 3% of GDP. Efforts to tackle debt are hampered by the complexity of achieving consensus within its five-party coalition government. External factors, such as rising energy prices due to the war in the Middle East and increased defense spending requirements, further complicate the fiscal outlook.
