By Kelly Cloonan
Fitch Ratings lowered Belgium's sovereign debt rating, citing deteriorating public finances, rising expenses and uncertain fiscal consolidation.
The ratings agency on Friday downgraded the country's long-term foreign-currency issuer default rating to A+ from AA-.
Belgium's fiscal position has structurally weakened over the last few years, and existing fiscal imbalances remain only partially addressed amid increased defence spending, Fitch said.
Fitch projects Belgium's general government deficit will worsen to 5.5% this year from 4.5% in 2024, and remain close to 5% of GDP over the medium term. That's well above historical median deficits of 2.6% and 1% for A and AA-rated peers, respectively, the company said.
The country also faces medium-term fiscal pressures from rising ageing-related expenditures and plans to accelerate its defence spending, which will likely account for greater shares of GDP in the coming years, Fitch said.
The federal government's fiscal consolidation plans also remain uncertain, with Belgium's Court of Audit identifying a high risk the government is overestimating second-round cost savings from structural reforms, the company said.
Fitch expects the country's debt to exceed 110% of GDP by the end of 2026 and continue rising, taking into account some consolidation efforts.
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
06-13-25 1803ET
