WASHINGTON, United States, April 18, 2026 (BSS/AFP) - Ratings agency Moody's downgraded Belgium's credit rating Friday, flagging its rising debt-to-GDP ratio and its government's constrained ability to deal with budget pressures.

The revision brought Belgium's rating to A1 from Aa3, placing it in a category of low -- rather than very low -- risk.

The outlook was changed from negative to stable.

"Debt-to-GDP is increasing despite significant consolidation measures that have been undertaken by the government," said Moody's in a statement explaining its decision.

"A stable outlook reflects our view that fiscal deterioration will continue while being balanced by Belgium's enduring strengths," it said.

It added that modest medium-term growth, higher interest expenses and growing spending due to defense and an ageing population complicate the government budget.

Meanwhile, Moody's expects that Belgium's government "will be unable to implement measures sufficient to stabilize the debt burden."

It added that debt will likely keep rising, even during periods of economic stability, unless officials take steps "beyond levels that we assess to be politically manageable."

Belgium is also vulnerable to a renewed energy price shock if war in the Middle East continues and keeps gas and electricity prices high.

ING Belgium senior economist Philippe Ledent said in a note Friday that although the country launched a fiscal consolidation drive over a year ago, "it still falls short."

"And the energy shock risks pushing public finances further off course," he added.