Fitch affirms Belgium's AA- rating with negative outlook

By Ovunc Kutlu

ISTANBUL (AA) - Fitch Ratings said Friday that it affirmed Belgium's long-term foreign currency issuer default rating at AA- with a negative outlook.

The rating agency said Belgium's ratings are supported by its diversified, high value-added and wealthy economy.

These factors, however, are balanced by "a very high and rising" level of public indebtedness and a political and institutional context that complicates fiscal adjustment efforts, it added.

The negative outlook, meanwhile, reflects the risk that the country's fiscal consolidation is insufficient to achieve its debt stabilization over the medium-term.

"After declining to 2.3% in 2023, inflation is on an upward trend again, driven by the rollback of the government's energy support," it said in a statement.

Fitch estimates inflation to average 4.3% this year but falling to 2.8% and 1.6% in 2025 and 2026, respectively.

It expects Belgium's real GDP growth moderating to 1.1% in 2024, from 1.4% in 2023, and staying below the country's growth potential of 1.2% in the following years -- recording 0.9% in 2025 and 1% in 2026.