Economic growth stalls first time in 3 years

Thursday 14 August 2008

The Dutch economy has failed to show a quarterly growth for the first time in three years, the national statistics office CBS said on Thursday.

'The economy is clearly cooling down,' CBS economist Michiel Vergeer told news agency ANP. 'Things are still going well in the Netherlands, but the tempo has gone.'

The economy in the second quarter of this year grew 2.8% compared with the same period in 2007. A country is considered to be in recession if the economy shrinks for two successive quarters.

Earlier this week it emerged that the government's economic policy unit, the CPB, has revised its 2009 growth estimate down to 1%. The definitive figure will be published on September 16 when the government presents its new spending plans.

Yesterday ministers met to discuss the 2009 budget in the light of worsening economic conditions.

According to media reports, they have agreed that at least pensioners and people on minimum incomes must not be worse off next year.

Overspend on childcare

In addition, the cabinet has been confronted with an extra €300m overspend on childcare, despite measures taken before the summer to reduce the bill, according to newspaper reports.

No decision has yet been taken on postponing the rise in value added tax (btw) to 20%. A delay would mean a €2bn shortfall for the treasury. This cash is needed to cover plans to scrap employee unemployment benefit premiums (WW).

Christian Democrat ministers are determined that the latter measure is implemented.

Finance minister Wouter Bos (Labour) is now looking at alternative ways to raise cash, news agency ANP says.

© DutchNews.nl

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