European Commission predicts Belgium's budget deficit will rise to 5.5% by 2026

On Monday, the European Commission warned that Belgium's budget deficit could rise to 5.4 per cent of gross domestic product (GDP) this year and 5.5 per cent in 2026. That rise is mostly due to ageing-related costs and defence spending, according to the economic forecast.

Belgium's budget deficit rose to 4.5 per cent last year. In its latest economic forecasts released on Monday, the European Commission warns that the government's budget deficit is threatening to increase further in 2025 and 2026.

According to the Commission, Belgium's budget deficit risks rising to 5.4 per cent this year, driven by rising spending on ageing-related costs and defence. In addition, interest expenditure will continue to rise due to higher debt and refinancing rates.

By 2026, the Commission forecasts a further increase to 5.5 per cent. This would be primarily due to increased interest expenditure and contributions to the European budget.

Meanwhile, Belgium's gross government debt is predicted to rise from 104.7 per cent of GDP in 2024 to 107.1 per cent in 2025 and 109.8 per cent in 2026.

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Exclusion for defence spending

European budget rules require member states to keep their deficits below three per cent. For this reason, several other countries, including France and Belgium, have been subject to a procedure since last year.

Belgium is invoking the EU's new option of excluding defence spending from the deficit calculation. Prime minister Bart De Wever's government aims to increase defence spending this year in order to reach NATO's target of spending two per cent of GDP on defence. According to the Commission, this alone will push Belgium's deficit up by 0.4 per cent.

The report also forecasts that Belgium's GDP will grow by 0.8 per cent this year and 0.9 per cent in 2026. The eurozone economy as a whole is expected to grow by 0.9 and 1.4 per cent respectively. The Commission lowered its growth forecasts partly due to uncertainty over US trade tariffs.

^{© BELGA PHOTO HATIM KAGHAT}

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