Since the beginning of the century, Belgium's budget deficit has continuously widened, reaching 5.2% of GDP in 2025. The primary balance has deteriorated from a surplus of nearly 7% of GDP to a deficit close to 3% of GDP, a level not seen since the early 1980s. The deterioration of the primary balance observed since 2000 can be almost entirely attributed to an increase in primary expenditures, while revenues have remained broadly stable. Over the last decade, revenues have decreased and primary expenditures have increased.
The analysis focuses on the budgetary evolution recorded since 2016, the year the sixth state reform was fully implemented. Belgium had just emerged from an excessive deficit procedure, and all levels of government had committed to aiming for budgetary balance.
Between 2016 and 2025, the budget balance deteriorated by 2.7% of GDP (amounting to 18 billion euros) and the primary balance by 3.3% of GDP (amounting to 21 billion euros), despite the commitment to budgetary balance. This deterioration occurred despite a decrease in interest charges of 0.5% of GDP (4 billion euros).
The erosion of the primary balance since 2016 is attributable to both a decrease in revenues (12 billion euros) and an increase in primary expenditures (9 billion euros). Previous studies by the Bank have shown that Belgium has high primary expenditures compared to its neighboring countries, particularly in education and subsidies.
The deterioration of the primary balance over the last decade is attributed to both the Federal State (11 billion euros) and the Communities and Regions (8 billion euros). The reduction in federal transfers has mitigated the deterioration at the federal level, while contributing to it at the regional level.
At the federal level, final primary expenditures increased by 7 billion euros, mainly due to social benefits and capital expenditures. In the regions, they rose by 2 billion euros, particularly in capital expenditures and remuneration. The decline in federal revenues (-8 billion euros) is explained by consumption and labor income taxes, partially offset by corporate income tax. On the regional side, the decrease (-2 billion euros) results from lower taxes on consumption and wealth.
The weakening of revenues has not been compensated by expenditure moderation. Federal transfers to communities and regions have dwindled. The own revenues of communities and regions have also decreased relative to their GDP. Primary expenditures in Flanders and the Brussels-Capital Region have increased, while those in the French Community have only slightly decreased.
In conclusion, Belgium would need a binding national budgetary framework to meet budgetary objectives and bring the debt ratio onto a sustainable trajectory.
