Brussels:Credit rating agency Moody's has affirmed Belgium's A1 rating, allowing the country to avoid a further downgrade. This comes as the federal government prepares to negotiate its 2027 budget, with an aim to achieve savings exceeding £10 billion.
According to Emirates News Agency, Moody's projects that Belgium's economy will grow by 0.7 percent in 2026, with growth rising to 1.0 and 1.1 percent in 2027 and 2028, respectively. Current inflation is expected to reach 3.5 percent, influenced by the Middle East conflict, increased energy prices, and weak external demand.
The agency forecasts a deficit of approximately 5.3 percent of GDP for Belgium this year, with a continuation of high deficit levels and increasing national debt in the coming years. Interest costs on the debt are a concern, with the average interest rate on 10-year bonds at 4.35 percent by the end of September, marking an increase of 85 basis points since the year's start.
Prime Minister Bart De Wever's government is targeting savings of at least £10 billion by 2029 to meet European Union spending requirements. However, there are internal disagreements within the ruling coalition over VAT adjustments and slowing the growth of healthcare spending.
In response to these austerity measures, trade unions have organized protests in Brussels, demonstrating against both existing and proposed budget cuts as negotiations continue.