Budget deficit set to rise to over 36 billion euro

The total budget deficit of Belgium’s federal, regional and language community governments has risen to over 36 billion euro. This is around 3 billion euro more than had been originally projected. The figures come from the latest report by the Budget Monitoring Committee. The federal budget deficit alone will reach 29 billion euro, 4 billion euro higher that originally projected. Difficult political decisions will need to be taken in the near future if the budget deficit is to be brought down. 

The fact that the budget deficit is higher than projected comes as no surprise. The Federal Secretary of State responsible for the budget Eva De Bleeker (Flemish liberal) told VRT News that when the government drafted the budget in October 2020 it had not taken into account the impact of a second wave of the coronavirus pandemic and this is now the case. Ms De Bleeker points to the extra cost incurred by keeping people on temporary unemployment and a host of additional corona measures.

With a total deficit of 36 billion euro, Belgium’s budget deficit stands at 7.5% of GDP. Nevertheless, the Federal Government insists that that its aim of bringing the budget deficit down to 3% of GDP, the maximum deficit allowed by the European Union, by 2024 will be reached.

"It is our ambition to finish there”, Mr De Bleeker said.

This means that this year a budgetary effort of 0.2% of GDP will need to be made. This will rise to 0.5% of GDP during 2022, 2023 and 2024. The Federal Secretary of State hopes that fiscal reforms, reforms to the labour market and reforms to the pension’s system will have a positive impact on the budget deficit.

 

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