Budget deficit rose sharply in 2023
Belgium's budget deficit rose sharply last year to 4.4% this is up from 3.6% during the previous year. The figures were released on Friday by National Bank of Belgium and the National Accounts Institute (NAI). The increased deficit pushed up the public debt to 105.2% of GDP.
The deficit widened in 2023 due to increased public spending, the cost of the ageing population and rising interest rates. The Federal Government had a deficit of 3.5% while the language communities and regions combined had a deficit of 1.2% of GDP. Local governments (municipalities and provinces) succeeded in balancing their books.
The deficit widened last year despite the lower impact of "temporary factors" linked to corona, energy costs and the war in Ukraine. The increase in public spending is due to policy decissions, such as the increase in the level of minimum pensions. Moreover, spending on the ageing population is increasing structurally and the interest burden to finance debt has risen now that interest rates are no longer at rock bottom. Index-linked rises in benefits and public sector wages also served to push up public debt.
Public debt stood at 614.9 billion euro at the end of last year compared to 577.9 billion euro at the end of 2022. 101.3 billion euro is debt accrued by the regions and language communities 24.8 billion is local authority debt with the Federal Government accounting for 504.3 billion euro of Belgium’s public debt.
Flemish debt up 90%
Flanders accounted for 35.3 billion euro of the total public debt. During the past 5 years Flemish Debt has risen by 90%. Flanders currently has a debt-to-receipts ratio of 52%. In both Wallonia and Brussels public debt is more than double the regional authorities’ receipts.