Moody’s raises pressure on Belgian governments

Belgian government finances are a cause for concern for Moody's. The American rating agency kept its credit score for Belgium unchanged at 'Aa3' on Friday, while lowering the outlook. Reforms are necessary at the federal and regional levels.

'Aa' means that Moody's considers the credit risk to be "very low". It is the second-best score. The '3' means that Belgium is at the bottom of that rating category. Moody's points to the "diversified, prosperous and innovative" economy, whereby Belgium can benefit from "its geographical location in the heart of Western Europe". "Belgium has shown better than expected resistance to economic shocks", it says, among other things. Moody's mentions the energy crisis and high inflation, which have been well-digested here.

However, the rating agency is also concerned about government finances and a lack of decisive reforms. It points to the high debt burden and the rising costs of ageing. That is why Moody's lowers the outlook for Belgium from 'stable' to 'negative'.

"Without a large-scale fiscal consolidation programme, the debt will continue to rise", emphasises the credit rating agency, which also recognises that such a programme is "challenging". Moreover, efforts are needed both at the federal level and at the regional and community level, "while Belgium lacks a coordination mechanism to achieve this".

The ratings that international credit rating agencies assign determine the extent to which a country can easily borrow money on the international markets.

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