For the first time, the debt of the Belgian public authorities exceeds €500 billion, L’Echo and De Tijd report, quoting figures from the National Bank of Belgium (NBB).
In the second quarter of 2020, no less than €32 billion were added to the Belgian State’s debt, which rose to €524 billion euros, a level corresponding to 115% of gross domestic product (GDP).
The sharp increase in State debt is mainly the consequence of the coronavirus crisis. The drop in revenue, due to the drop in activity, and the sharp rise in government spending to support the economy caused the budget deficit to explode.
However, the public debt has increased by an amount much higher than the budget deficit. This was because the Treasury borrowed more money on the financial markets than it needed to finance its immediate needs.
“The main reason is that we wanted to build up a reserve. In addition, the budget deficit has grown less than we expected,” says Jean Deboutte, director of the Federal Debt Agency.