US rating agency Standard & Poor's (S&P) confirmed Belgium's ‘AA’ rating on Friday, noting that the outlook remains stable, whereas it had been feared that it might change to negative.
A long-term rating of ‘AA’ - the third best after ‘AAA’ and ‘AA+’ - means Belgium is in a good position to meet its financial obligations, according to S&P. In the short term, the rating agency rates Belgium even higher: ‘A-1+’, the highest rating.
Belgium's economic growth remains higher than that of similar countries in Europe, according to S&P, which forecasts growth of 1.2% in 2024 and 1.3% on average in 2025-2027.
The rating agency noted in a press release that it expects the new Belgian government, once formed, to implement fiscal consolidation measures to avoid a further weakening of the fiscal position and a deterioration in financing conditions.
It forecasts that net public debt will be close to 100% of gross domestic product (GDP) until 2027.
The rating agency also expects the budget deficit to decline gradually to 3.4% of GDP by 2027.
The outlook for Belgium remains stable, said S&P, which therefore expects the situation not to change any time soon.
The risks of a relatively large budget deficit and rising public debt are outweighed by the potential for higher economic growth and an improvement in Belgium's already strong external position, according to the rating agency.
It warns, however, that it could downgrade the rating if Belgium fails to reduce its high budget deficit.
It also warns that political fragmentation could complicate the introduction of economic and fiscal reforms by the next government.
