BRUSSELS, Rating agency Fitch has lowered the outlook for its credit rating for Belgium from “stable” to “negative,” citing the increasing cost of an ageing population and automatic wage indexation.
Among other things, the credit rating agency refers to the Belgian government budget deficit, which is expected to rise to 5.2 percent in 2023, Belga news agency reported on Saturday. According to the rating agency, the public debt may rise to 107 percent of GDP by 2024 Furthermore, Fitch refers to the “fragile” federal government coalition. “In our view, it is unlikely that the government will take measures to reduce the fiscal deficit, given the upcoming federal parliamentary elections in 2024,” Fitch added.
A report by Belgium’s Central Economic Council already called the country’s budgetary situation “alarming” and “clearly untenable” early this year.
European indicators, as well, have shown that Belgium needs to make heavy adjustments to stabilise its finances, noted Belga.
Only two weeks ago, Belgium’s Federal Planning Bureau warned that given an unchanged policy, government deficits are likely to reach 5.7 and 5.4 percent of GDP this year, up sharply from 4 per cent in 2022.
In the third quarters of last year, Belgium already recorded the largest deficit among the Eurozone countries with 5.1 per cent of its GDP.
Source: Kuwait News Agency (KUNA)