Budget deficit increasing less sharply than initially forecast
Belgium’s budget deficit will increase less shaply that the Monitoring Committee had previously forecast. In its report the Monitoring Committee, a group made up of high-ranking civil servants that monitors the state of Belgium’s public finances, had forecast a deficit of 38.4 billion euro in 2028. However, what is described as “an inconsistency” in the Monitoring Committee figures means that the forecast has now been revised down to 33.4 billion euro. Nevertheless, the new revised forecast still leaves Belgium with an exceptionally high budget deficit.
The publication of the Monitoring Committee’s report traditionally marks the start of the Federal Government’s work on the budget for the next year or as is the case now work on the corrections to the current year’s budget.
The Monitoring Committee’s report forecast a deficit of 41,6 billion euro for federal government departments and the social security system in 2028. This is 5.7% of GDP.
Inconsistency
The aging population is the motor behind the increase in public debt. However, it would appear that the Monitoring Committee’s forecast was too pessimistic due to a miscalculation. The miscalculation came to light when the Federal Policy and Support Department analysed the Monitoring Committees’ figures.
The financial daily ‘De Tijd’ explains that the reason for the mistake in the forecast is highly technical. It came about due to the two different ways in which the forecast of the amount that will be needed to make up the short fall in the social security budget. The Monitoring Committee uses one method, while the Social Security Service uses another to calculate this.
In the Monitoring Committee’s recent report the amount that the Social Security Department would need was calculated using to the Committees’ on method, while the estimate for primary expenditure was made using the Social Security Department’s method. An inconsistency was also found in the calculations made with regard to the provision made to take account of the retail price index.