The spending cuts outlined in Thursday’s coalition accord will lead to lower economic growth and an increase in unemployment, according to calculations by the government’s macro-economic forecasting agency CPB.
The budget deficit will fall by 0.7% of GDP by 2015, taking it to 2.3% the CPB said.
But unemployment will rise 1.4 percentage points to 6.75% and the economy will grow by 1.25% a year, below earlier forecasts.
‘This will lead to lower tax receipts and higher spending on unemployment benefits, the CPB said.
The job losses will stem from cuts in employment projects for people with a handicap and civil service cutbacks.