The Flemish government is facing a potentially higher budget deficit for 2024, with estimates indicating it could be one billion euros higher than initially projected, according
to a report by Flemish public broadcaster VRT. This fiscal challenge is attributed in part to diminishing property registration fee revenues, driven by a cooling housing market.
The budget projection is based on data provided by Budget Minister Matthias Diependaele, who cites weaker-than-anticipated economic growth and reduced income from registration fees as contributing factors. If no policy changes are made, the projected Flemish budget deficit for 2024 would stand at 2 billion euros. However, if additional expenses related to stimulus measures and the large-scale Antwerp ring road completion project, which are traditionally kept off the balance sheet, are factored in, the overall budget deficit could swell to 3 billion euros.
The Cooling Property Market
Last week, Minister Diependaele disclosed that the Flemish government anticipates lower revenue from property registration fees in 2024 due to a decline in home sales. Belgium, including the Flanders region, is experiencing a trend similar to the international phenomenon of a cooling housing market, attributed in part to rising interest rates. This shift in the property market is expected to result in a 700 million euro decrease in revenue compared to the government's initial budget projections.
Furthermore, a 300 million euro reduction in revenue is attributed to economic growth falling short of expectations. The Federal Planning Bureau (FPB) revised its estimate, suggesting that the economy is likely to grow by 1.3% instead of the previously forecasted 1.6%.
September Declaration
This week, ministerial offices are conducting a comprehensive review of the 2024 budget, in preparation for the traditional "September declaration" scheduled for September 25th by Flemish government leader Jan Jambon before the Flemish parliament. It is worth noting that last year, the minister-president faced challenges when the September declaration had to be postponed by four days due to a political deadlock among coalition partners.