National Bank of Belgium warns budget path remains unsustainable

BRUSSELS, 5th March, 2026 (WAM) — Belgium’s budget deficit widened further in 2025, reaching an estimated 5.3 percent of GDP, while public debt climbed to around 107 percent of GDP, according to a new report by the National Bank of Belgium (NBB).

The bank warned that additional consolidation efforts will be required to restore fiscal balance.

Belgium’s budget deficit deteriorated by nearly 1 percent compared with 2024, largely due to weaker revenues. According to the latest estimates, only France has a larger budget deficit within the eurozone. Public debt has risen to around 107 percent of GDP, while in other high-debt countries – with the exception of France – it has fallen.

Public spending, meanwhile, again outpaced economic growth. Total expenditure exceeded 54 percent of GDP in 2025, the highest level since the pandemic and roughly 5 percentage points above the EU average. The main driver of spending growth was healthcare and long-term sickness benefits, which increased by nearly €3 billion, more than any other category.

The NBB noted that the federal government has adopted far-reaching reform and consolidation measures, including changes to unemployment benefits, long-term sickness schemes and future pensions, aimed at raising employment and strengthening fiscal sustainability.

However, the bank warned that the announced measures are insufficient to restore fiscal sustainability within a reasonable timeframe. On current projections, the deficit would still amount to around 5 percent of GDP by the end of the decade. “That is obviously not sustainable,” the report stated.

Belgium’s widening deficit since the start of the century has primarily been driven by structurally rising expenditure. Although interest payments declined for many years, this was more than offset by higher primary spending. Government revenues, by contrast, have remained broadly in line with their level in 2000.