Belgium’s budget deficit rises faster than eurozone average
Wednesday, 22 July 2020
Belgium’s budget deficit increased more strongly in the first quarter than on average in the euro area, figures by Eurostat show.
The budget deficit in the eurozone as a whole rose to 2.2% of gross domestic product (GDP), from a 0.7% deficit in the fourth quarter of 2019. This puts the deficit at its highest level since the second quarter of 2015. Belgium’s budget deficit, meanwhile, increased to 6%, up from 1.5% in the fourth quarter of 2019.
Public spending by euro area countries as a percentage of GDP rose to 49.2% in the first quarter, from 47.1% in the previous quarter. Revenue rose from 46.4% of GDP to 47%.
Meanwhile, the euro area countries’ public debt averaged 86.3% of GDP in the first quarter, up from 84.1% at the end of last year.
Belgium’s national debt is also rising faster than the average of the euro countries. Compared to the fourth quarter of 2019, the public debt ratio rose by 5.7%, the strongest increase in the eurozone. The Belgian government debt ratio was 104.4% at the end of the first quarter. Belgium thus ranked fourth among countries with the highest ratio, after Greece (176.7%), Italy (137.6%) and Portugal (120%).
Eurostat expects the debt to rise sharply in the second quarter because countries borrowed many billions to withstand the coronavirus crisis, while the economy is shrinking.
European budgetary rules prescribe a debt of up to 60% of GDP and a government deficit of up to 3%, but because of the crisis, the EU is letting go of these criteria for the time being.