European Commission says Belgian budget “on track”

The European Commission has said Belgium’s federal budget remains “on track”, despite a slight breach of the agreed spending limit in 2025.

In its opinion on Belgium’s 2026 draft budget, submitted in January, the Commission noted that net expenditure is set to rise by 3.8 per cent in 2025, above the 3.6 per cent growth ceiling. However, the 0.1 per cent of GDP deviation falls within the flexibility allowed under the national escape clause, which grants extra room for defence spending.

In 2026, net expenditure growth is forecast at 1.9 per cent, below the 2.5 per cent limit.

Belgium is currently subject to the EU’s excessive deficit procedure, launched in summer 2024, alongside eight other member states whose deficits and debt exceed treaty thresholds.

The Commission’s assessment takes account of the VAT reform proposed by the so-called Arizona government. Planned VAT rises on culture, sport and takeaway food have since been at least temporarily scrapped, leaving a gap of more than €400m. The government led by Bart De Wever has pledged to offset the shortfall through other measures.

On the wider economy, the Commission broadly agrees with the government’s projections. It expects real GDP to grow by 1.1 per cent in 2026, in line with official forecasts, though inflation is seen slightly higher at 2 per cent.

A fresh assessment is due in June as part of the European Semester cycle.

^{© BELGA PHOTO JAMES ARTHUR GEKIERE}