Belgium must reduce its deficit without delay, argues the High Council of Finance
The High Council of Finance pleads, in an opinion published Saturday evening, for a reduction”without delay” of the budget deficit. The opinion is given in view of the Stability Program that the federal government must submit to the European authorities by the end of April.
The High Council of Finance stresses that its opinion comes again in a context of particularly high uncertainty. After the coronavirus crisis, which is not quite over, it is the turn of the war in Ukraine to pose its share of uncertainties. While growth rebounded strongly in 2021, growth looks set to be much less vigorous this year. However, our country should avoid regression despite the Russian invasion and soaring energy prices.
Economic growth would remain positive in the coming years
“Given that the latest hopes indicate that economic growth will remain positive in the years to come – despite the war in Ukraine – the Section (Need for financing of the High Council of Finance, editor’s note) recommends to take care of the improvement in the structural balance at all levels of power“, can we read in the opinion of the High Council of Finance, which recalls that the Belgian deficit largely exceeds 3% of GDP (6% of GDP in 2021, according to estimates) and the public debt 100% of GDP (108 .9% of GDP at the end of 2021).
It is thus recommended “to reverse the trend without further delay” and to reduce, as long as growth is positive, the structural balance by at least 0.6 percentage point of GDP per year from 2023. The proposed trajectory to reduce the Belgian structural deficit by 3.9% of GDP 2.1% of GDP in 2025 and 0.9% of GDP in 2027.