Belgium's Economic Challenges: Balancing Growth and Deficit Warnings

Belgium faces potential economic challenges with a budget deficit projected to reach 4.9% of GDP by 2025, warns the European Commission. Rising pension, social benefit costs, and national debt interest could push debt beyond 105% next year, amid geopolitical uncertainties and a fluctuating eurozone economy.

Brussels [Belgium], November 15 (ANI/WAM): In a stark warning, the European Commission has highlighted the risk of Belgium's budget deficit ballooning to 4.9% of GDP by 2025 if current policies remain unchanged. The Commission's latest economic growth forecast underscores the relentless rise in spending on pensions and social benefits, along with mounting interest expenditures for national debt, which could exceed 105% next year. The challenge for Belgium, like other EU nations, lies in balancing the need to reduce debt while stimulating economic growth.

Reports from the Belga News Agency indicate a modest revival in the European economy after years of stagnation, as revealed in the Commission's forecast. The eurozone's average GDP is projected to grow by 0.8% in 2024, with an anticipated increase to 1.3% in 2025 and 1.6% in 2026. This rebound is driven by a recovery in purchasing power and easing interest rates. Belgium, specifically, is on track to achieve 1.1% growth in 2024, slightly below the Netherlands and Luxembourg but ahead of Germany and France for the same period.

The Commission also warns of prevailing uncertainties that might hinder European economic stability. Geopolitical tensions, such as the conflicts in Ukraine and the Middle East, are cited as potential risks to Europe's energy security. Additionally, new protectionist measures from EU trade partners could disrupt global trade, posing a threat to Europe's open economy stance. Belgium's projected inflation rate of 4.4%, the highest in the eurozone, further complicates the economic outlook.

(With inputs from agencies.)