In the Belgian newspaper De Tijd, several policy economists including Kevin Spiritus, Assistant Professor of Public Economics at Erasmus School of Economics, believe that the state of public finance in Belgium is unsustainable in the longer term. According to them, the upcoming budget review is the last chance for this government to take much-needed steps.
According to almost all forecasts, Belgium's budget deficit will be around five per cent of gross domestic product this year. This percentage is one of the highest among Western countries. Moreover, Belgium's ageing population will cause additional public spending in the coming years, which could lead to an even bigger increase in the budget deficit.
In addition, interest rates have risen again in the past year. The favourable periods of very low interest rates are over and there is a chance that we will see high interest rates again in the coming years, the economists said. This rise in interest rates could then create an even higher public debt and thus a higher government deficit. In short: concerns about Belgium's public finances are growing.
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You can read the full article from De Tijd, 17 March 2023, here.