European Commission expects Belgium’s debt to drop below 100%-of-GDP mark
Thursday, 08 November 2018
Belgium’s public debt should fall below the symbolic threshold of 100% of Gross Domestic Product (GDP) in 2019, the European Commission predicted in its Autumn forecast on Thursday. The country’s public debt, which was 106.5% in 2015, should end this year at 101.4%, go down to 99.8% next year and drop further to 98.7% in 2020. In Spring, the Commission’s forecast for 2019 had been 100.2%. However, the Commission warned that while the news is currently good, the debt-reduction rhythm seems to be slowing down.
For its part, the budget deficit is showing a negative trend. The Commission puts it at -1.1% in 2019, whereas it had projected it at -1.3% in Spring. Its projection for 2020 is -1.3%. In this regard, the Commission sees a link between this progression and Phase II of the tax shift, implemented this year, and Phase III, to be applied in 2019.
The structural deficit should follow the same trend – 1.3% in 2019 and -1.7% in 2020. The Federal Government had set 2020 as the year of a return to a balanced budget, but the Commission bases its projections on an unchanged policy.
The Commission projects that economic growth will slow down to 1.5% in 2018 and 2019, and 1.4% in 2020, with increasing domestic demand offset by decreasing world trade. This is comparable to the trend observed in the euro zone, where growth is slowing after reaching a 10-year peak in 2017.