{ "title": "Planning Bureau lowers Belgium\u2019s economic outlook due to war in Middle East", "modified_at": "2026-06-12 13:02:43", "published_at": "2026-06-12 13:02:00", "url": "https://www.belganewsagency.eu/planning-bureau-lowers-belgiums-economic-outlook-due-to-war-in-middle-east", "short_url": "http://prez.ly/2GId", "culture": "en_BE", "language": "EN", "slug": "planning-bureau-lowers-belgiums-economic-outlook-due-to-war-in-middle-east", "body": "

Due to the consequences of the war in the Middle East, the Federal Planning Bureau is revising Belgium’s economic and budgetary outlook downwards. The institution now expects growth of just 0.7 per cent this year. It also calculated that, with the government’s current measures, the public deficit will stabilise at 5.1 per cent of gross domestic product in 2026. The experts warn of an “interest snowball” and suggests a rapid adjustment of public finances.

The European economy is being temporarily held back by higher energy prices, the Planning Bureau said on Friday in its latest forecasts. As a result, the institution now expects growth of just 0.7 per cent for Belgium this year. That growth is, however, expected to pick up to 1 per cent in 2027, mainly thanks to a recovery in housing investment. In February, the Planning Bureau had forecast growth of 1.1 per cent for 2026 and 2027.

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\n\n \n Further measures needed to safeguard Belgium's public finances, planning bureau warns \n \n
\n Additional measures will be needed in both the short and long term to safeguard the sustainability of Belgium\u2019s public finances, according to new...
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Exports and public investment are expected to boost the growth of the Belgian economy to 1.2 per cent in 2028. This would be followed by 1.4 per cent growth in 2029 and 1.3 per cent in 2030. The forecast for 2031 stands at 1.2 per cent growth.

Concerning public finances, the Planning Bureau expects the public deficit to stabilise at 5.1 per cent this year. It would then gradually rise to 6.4 per cent of GDP in 2031. Previously, the institution had forecast a deficit of 4.9 per cent in 2026, rising to 6.3 per cent in 2031.

According to the Planning Bureau, the deterioration in public finances follows a variety of developments. Some expenditure is falling as a proportion of GDP, for example the operating costs of government departments or social benefits (with the exception of healthcare). However, other expenditure are rising faster than economic growth: healthcare and defence. The reform of personal income tax and the interest burden on public debt are also having an increasing impact.

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\n\n \n Planning Bureau urges Belgium to act fast on budget measures, lays out 264 options \n \n
\n The Federal Planning Bureau has compiled a list of 264 concrete measures the government could use to close Belgium's budgetary gap. The analysts...
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This is reflected in the expected level of government debt. It is projected to rise from 107.9 per cent last year to 109.9 per cent in 2026 and ultimately reach 122.3 per cent in 2031. By that time, the risk of a self-reinforcing debt spiral cannot be ruled out, the warning states. In other words, the Planning Bureau believes that corrective action is needed.

Inflation is also expected to peak at 3.4 per cent in 2026, but eventually fall to 1.7 per cent in the years that follow. After a temporary decline of 0.7 per cent, household purchasing power is expected to rise again from 2027, by an average of 1.3 per cent per year. Finally, employment is expected to continue to rise. For this year, there are expected to be 20,000 additional jobs, and over the entire period from 2027 to 2031, this would amount to almost 230,000 jobs.

 

Budget minister Vincent Van Peteghem and prime minister Bart De Wever © BELGA PHOTO ERIC LALMAND

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