Fitch rating agency has warned Belgium’s rising pension costs is cause of concern.
The measures taken by the government to address the issues to manage the costs of an ageing population are not insufficient the agency warns.
On 4 April, the Parliament passed a law introducing several pension reforms. “While the package includes some changes that reduce the cost of an aging population, this positive impact is offset by the previously approved increase in minimum pensions,” from 2020, Fitch points out.
The rating agency refers to Belgian National Bank’s estimates, which predict a negative impact of 0.15% of gross domestic product (GDP) by the year 2070 – equating to approximately €900 million in today’s currency.
Fitch points out that Belgium’s rating outlook is negative, due to fears the country will not be able to sufficiently stabilise its public debt.
Currently, Belgium holds an AA- rating, however, its outlook has been negative since March 2023. This could result in a downgrade from Fitch if steps are not taken to reduce the budget deficit.
