The notion agency Moody’s announced that it had maintained the rating of Belgian sovereign debt at its current Aa3 level, however changing its outlook «stable» has “negative”estimating that the debt burden should continue to increase.
According to the rating agency, the “next government will not be able to implement measures to stabilize the debt burden”while the “small effort at budgetary consolidation” of the outgoing government “is not structural”.
“Without a broad budgetary consolidation program, the debt will continue to increase due to the structural increase in spending in recent years and the persistence of pressure to maintain them”added the agency in its press release.
What’s more “such an effort will require that it be shared by all levels of government but Belgium lacks intergovernmental cooperation mechanisms” between its different levels, pointed out Moody’s.
Excessive deficit procedure
The agency underlines that an increasingly significant part of the debt, even if it is the responsibility of the federal government, is generated by the Belgian regions and communities.
Belgium is, like France, targeted by a procedure for excessive deficits and, pending a new government, has warned the European Commission that it will not be able to present its budgetary forecasts before December.
The European Commission expects Belgium to have a public deficit reaching 4.7% of GDP in 2025, after 4.4% this year. The debt would amount to 106.6% of GDP next year compared to 105% in 2024. Among the EU Twenty-Seven, only Greece, Italy and France have even higher debt forecasts. high.
These figures are well above the limits of 3% of GDP for the deficit and 60% of GDP for the debt, which were set by European budgetary rules.
Related News :