Belgium is in a vulnerable position as a result of the war in the Middle East, the Governor of the National Bank, Pierre Wunsch, warned on Tuesday.
"We are truly vulnerable, and it is only a matter of time before the markets react," Wunsch told the House Finance Committee.
Wunsch appeared before the Chamber to present the National Bank’s 2025 annual report, but also outlined the consequences that the conflict in Iran could have on the Belgian economy.
If the war continues, the global economy will slow down, potentially resulting in "very low growth or even a technical recession in Belgium," he said.
"The deficit would then rise by 1 to 2% of gross domestic product (GDP), and we would be truly vulnerable. It would then be only a matter of time before the markets reacted."
According to the governor, the government must be able to pursue credible policies. "If that is the case, we can certainly survive this. But if the government fails to bring the deficit under control and continues taking measures, then we are very vulnerable," he said.
"To put it plainly: the money has run out. The resources we had in 2022 to absorb the crisis are no longer available," Wunsch concluded.
