Brussels, Belgium – The International Monetary Fund warned of widening fiscal deficits and rising public debt in Belgium, calling for decisive action to address the challenges ahead.
The International Monetary Fund, in its annual assessment of the Belgian economy released today, praised its strength and resilience.
With current policies and ongoing reforms in the areas of taxation, pensions, the labor market and healthcare,
However, he stressed that these efforts are insufficient in light of the increasing pressures resulting from global trade tariffs.
The demands of environmental transformation, and increased defense spending.
public debt would continue to rise
The report predicted that public debt would continue to rise until 2030 despite reforms.
Driven by factors including an aging population, which weakens growth prospects and increases the cost of public spending,
Expressing concern over the federal government’s optimism
about the possibility of reducing the deficit to 3% of GDP by 2029,
He warned of the risks of losing market confidence, based on previous international experiences
that witnessed a sudden decline in investor confidence.
The fund called for improved spending efficiency in the areas of pensions, healthcare and education.
Strengthening coordination and cooperation between federal
and regional authorities to ensure better planning for public investments.
On the tax front, he recommended transferring part of the tax burden from labor to capital.
He proposed reducing current exemptions in capital gains tax
to increase revenue and achieve greater fairness.
The head of the IMF mission to Belgium, Jean-François Dauphin,
said that existing tax incentives need careful review.
He noted that it amounted to 6.1% of GDP in 2021,
That is equivalent to about 38 billion euros by 2025, and he questioned the extent to
which these measures are consistent with public policy priorities and their cost-effectiveness.
He stressed that reforming ineffective exemptions and incentives could achieve significant financial savings.
Regarding the labor market, he stressed the importance of deepening cooperation
with EU countries in the areas of the single market, financial integration and the unification of energy markets.
He warned that inaction could lead to more severe economic consequences for Belgian citizens.
