Moody’s has kept Belgium’s sovereign credit rating unchanged at A1, despite warning of weak growth, a high budget deficit and rising debt costs.
The decision was confirmed in the rating agency’s review report published on Friday. Moody’s had cut Belgium’s rating in April, but this time left it unchanged.
Belgium’s A1 rating is the fifth-highest on Moody’s scale. An “A” rating means the agency considers the risk of default to be low, while the “1” indicates Belgium is among the stronger borrowers in that category.
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Moody’s expects Belgium’s economy to grow by 0.7% of GDP this year, before rising to 1.0% in 2027 and 1.1% in 2028.
The agency said this year’s slowdown was linked to the impact of the conflict in the Middle East, which has pushed up energy prices and weakened foreign demand.
Inflation is expected to rise to 3.5% in 2026.
Moody’s said Belgium’s budget deficit would likely reach about 5.3% of GDP this year. It expects the shortfall to remain high in the coming years, while the country’s debt burden also continues to increase.
However, the agency said the government’s search for €10 billion in budget savings could help slow the rise in debt over the next few years.
Moody’s also warned about the growing cost of servicing that debt. At the end of September, the average interest rate Belgium had to pay on 10-year bonds stood at 4.35%, 85 basis points higher than at the start of the year.
The agency noted, however, that rising interest rates are affecting most countries.
Earlier this week, Belgium’s National Bank and Debt Agency also warned the government that without clear action, the country could face a debt-interest snowball effect from 2029, or possibly even sooner.
