The budget deficit of public administrations in Belgium increased to 4.2% of GDP in 2023, as reported by the National Accounts Institute (ICN) and the National Bank of Belgium (BNB) on Friday.
This represents a rise of 0.6 percentage points compared to 2022, but a decrease of 0.2 percentage points from the initial estimate published by the BNB in April.
The improvement in the public administration’s financing balance to 4.2% compared to April is mainly due to lower-than-expected spending following the energy crisis and several methodological changes.
According to the report, the worsened budget deficit between 2022 and 2023, after two years of improvement, is attributed to a significant increase in public spending. Federal levels saw a deficit of €19.6 billion, an increase of €5.8 billion in a year, while communities and regions had a deficit of €7 billion, up by €1.7 billion annually.
Conversely, local administrations improved their balance from a deficit of €460 million to €78 million in a year.
The ICN also highlighted regional disparities: “The debt of the Walloon Region and the Brussels-Capital Region is twice as high as their revenues in 2023. In the German-speaking Community, the debt amounts to 167% of revenues.” As a result, public debt rose to 103.1% of GDP by the end of 2023 – an increase of 0.5 percentage points in one year.
“Given the continuing strong growth of the GDP in nominal terms, the rise in the debt ratio in 2023 is entirely attributable to the budget deficit,” analysed the ICN.
