- June 13th, 2014
The Dutch economy is spluttering into life, with 0.2% growth this year but 1.6% growth forecast for 2015 and 2016, the Dutch central bank said on Tuesday. Last winter was mild and gas production and consumption was low which hampered economic growth, the bank says in its half-yearly report.
However, underlying signs of growth are ‘unmistakable’, with the bank forecasting the strongest growth in the coming two years since the economic crisis began in 2008. The budget deficit and government debt are set to fall slowly. The bank expects the deficit, which is already under the EU norm of 3%, to fall further to 2.7% this year, 2.2% next year and 1.8% in 2016.
Debt However, government debt is expected to remain at around 74%. ‘The economy is nowhere near regaining its previous strength,’ bank director Job Swank said during a press conference. He expects more budget cuts with no room for tax reductions. Recovery is a ‘bumpy road’, said Swank. Many people are still unemployed and industry is not yet back to full production capacity.
He therefore warns against spending any budget windfalls. ‘The cabinet must give priority to making the government finances healthy,’ he said. ‘It is too soon to hand out windfalls.’