Belgian local government debt explodes
The debt of Belgium's communities and regions is growing much faster than that of the federal government. This is the conclusion of De Tijd on Friday, based on figures from the Belgian National Bank. The federal government's debt remains much higher than all the regions and communities combined, however.
The debt of the communities and regions increased by 60 per cent to 93.5 billion euros between 2018 and 2022. In particular, Brussels (122 per cent) and Flanders (76 per cent) have seen their debt rise significantly. The federal government's debt has risen by 22 per cent in the past four years to 474 billion euros.
With a debt of 105 per cent of gross domestic product (GDP) or almost 578 billion euros, Belgium has one of the highest rates in Europe. This is not just down to the federal government. Brussels' debt has risen to over 10 billion euros, Flanders' 32 billion euros, and Wallonia's 34 billion euros.
To explain the rapidly growing debt of the regions and communities, the National Bank points to the pandemic support. During the pandemic, the provinces supported businesses and care centres and financed contact tracing.
In addition, Wallonia was hit by severe flooding in 2021. However, even in 2022, when the pandemic was largely over, the budget deficits of the communities and regions remained significant.
All governments, except for the Flemish government, will have to take significant additional consolidation measures, the National Bank says in its economic journal.