However, the outlook remains negative. S&P indicates that it anticipates the risks linked to the reduction of the Belgian budget deficit.
The public finance rescue operation is launched
“Our outlook, which expects a reduction in the budget deficit to 3% of GDP by 2028, assumes the full implementation of the pension and labor market reforms adopted in 2025, as well as additional measures currently being negotiated for the 2026 budget,” the agency specifies. S&P nevertheless notes that the implementation faces “considerable political and social opposition”. “The reforms are already sparking national protests, while negotiations within the coalition on the 2026 budget continue. In the absence of reforms, the deficit could reach 6% of GDP by 2028,” she warns.
S&P also identifies other risks. As a logistics and commercial hub, Belgium is sensitive to macroeconomic uncertainties in Europe. Additionally, tighter fiscal policy could weigh on private consumption, which has been an important driver of economic growth thanks to automatic wage indexation.
Earlier this month, Moody’s had already reached a similar conclusion by maintaining Belgium’s credit rating, with a negative outlook. The judgment of rating agencies is important because their rating influences the interest rate a country must pay when it borrows money. S&P’s decision comes at a crucial time, with federal budget negotiations at an impasse.
Federal budget: Bart De Wever has not said his last word
