Belgium's budget deficit could rise to 5.4% of its gross domestic product (GDP) this year, and to 5.5% next year, according to the latest economic forecasts by the European Commission on Monday.
Belgium ended 2024 with a 4.5% deficit, and according to the Commission, that deficit risks rising to 5.4% this year driven by rising spending on the ageing population and defence. Additionally, interest expenditure will also continue to rise.
By 2026, the deficit would reach 5.5%. This would mainly be due to higher interest expenditure and contributions to the European budget, although new government measures on the labour market, pensions and taxes will have a positive effect, according to the Commission.
In the Eurozone, only France would go deeper into the red this year and next.
According to the forecasts, Belgium's public debt is set to rise from 104.7% at the end of last year, to 109.8% in 2026.
European budget rules require Member States to keep the deficit below 3%.
For this reason, Belgium, France and a number of other countries have been facing a procedure since last year. Belgium is using the new option of excluding defence spending from the deficit calculation under that procedure.
Belgium's GDP is expected to grow by 0.8% this year and 0.9% next year. The Eurozone economy as a whole would grow by 0.9% and 1.4% respectively.
The Commission lowered its growth forecasts, partly because of uncertainty over US trade tariffs.
