Belgium's budget deficit rises to 5.2 per cent of GDP

Belgium closed last year with a budget deficit of 5.2 per cent of GDP, the National Accounts Institute (NAI) announced on Monday. The deficit is a "significant deterioration" from 4.4 per cent in 2024, driven mainly by a worsening situation at the federal level.

Belgium's total deficit amounts to 33.2 billion euros, the figures reveal. Primary expenditure rose by 12.1 billion euros, pushing the primary expenditure ratio up by 0.1 per cent of GDP. Interest expenditure climbed for the fourth consecutive year in absolute terms, reaching 14.282 billion euros, or 2.2 per cent of GDP.

The deterioration is largely driven by the federal government, whose deficit increased by 7.3 billion euros, reaching a total of 24.1 billion euros. This is due to lower-than-expected revenue, the NAI says. Increased defence spending does not yet play a significant role in the 2025 balance.

The deficits of the communities and regions improved slightly but remained elevated. Flanders and Brussels recorded a modest improvement, while Wallonia's budget deteriorated significantly due to lower revenues. The balance of local authorities improved, in line with the traditional pattern following an election year.

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Divided coalition

The figures come days after Moody’s downgraded Belgium’s credit rating for the first time in 15 years, from Aa3 to A1. This means that the agency now considers Belgium’s risk of default to be "low" rather than "very low". The agency is concerned about the country's higher borrowing costs, growing public debt, and mounting expenses related to an ageing population.

The federal government is expected to discuss further budget cuts before the end of the summer. Meanwhile, the ruling coalition is debating whether to introduce temporary energy support measures due to the conflict in the Middle East. While these could help vulnerable households, they would make the Belgium's budget situation even worse.

^{Budget minister Vincent Van Peteghem and prime minister Bart De Wever. © BELGA PHOTO ERIC LALMAND}

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