From January, Belgium will begin provisional budget spending (douzièmes provisoires), capping monthly outlays at 1/12 of the previous year’s budget due to the lack of federal government agreement.

Taken together, the provisional-spending approach is fragile and risky, with the potential to escalate political crises and financial instability if reforms and coherent budgetary frameworks are not established promptly.

Belgium’s National Bank warns debt service will be unsustainable under current policies, projecting a rise from about 11 billion euros in 2025 to roughly 41.5 billion euros by 2034, highlighting the urgency of timely reforms.

Defense outlays and other high-cost items are treated as provisional credits rather than permanent increases, a practice that could cost billions if reforms are postponed.

With no formal 2026 budget by the deadline, provisional spending will cap new appropriations and complicate fiscal planning, triggering concern from government sources about potential political and economic fallout.

Tax reform discussions include changes to the capital gains tax and a new regime for long-term sick leave and certain pension provisions, with adjustments potentially drifting into April due to administrative logistics and affecting 2026 revenue.

Other reforms—labor market flexibility, long-term sick leave, pension penalties, and capital gains tax adjustments—are stalled by gaps in legal and budgetary frameworks, risking only partial savings and potential roll-overs into 2026 or later.

The economic outlook is mixed: 2025 expenditure growth remains high but is expected to ease in 2026, possibly reducing immediate pressure on budget approval while leaving structural reforms and defense spending as key unresolved issues.