Belgium

The economy has been resilient through turbulence but remains scarred with large structural fiscal deficits, elevated and rising public debt, and a weak external position. Reducing vulnerabilities and imbalances against headwinds from long-term spending pressures and a deteriorated, more uncertain external environment requires deep reforms. The federal coalition government launched welcome pension, tax, and labor market reforms while seeking to curb deficits and public debt. However, pushback by labor unions, internal coalition differences, and insufficient coordination between the regional and federal governments complicate the implementation of the reform agenda.