The Dutch budget deficit will be higher at the end of 2011 than forecast in September, finance minister Jan Kees de Jager said in his annual autumn financial statement on Tuesday.

By year-end, the deficit will have reached 4.5% of gross domestic product, 0.3 percentage point higher than the earlier forecast. The rise is largely due to a €1.5bn shortfall in tax revenues and local authority overspending on social security and care services.
‘The Dutch economy is in difficulties, mainly due to the debt crisis and uncertainty in Europe,’ De Jager said. ‘So the lower tax receipts are not a complete surprise.’
Improvements
Compared with 2010, when the budget deficit reached 5.1%, there has been an improvement this year, the minister said. ‘The cabinet is working hard to get the government’s finances in order and reduce the budget deficit still further, to meet European agreements.’
There is mounting evidence that the government may be forced to make more spending cuts on top of the €18bn already agreed.
The national statistics office CBS said earlier this month the Dutch economy contracted by 0.3% in the third quarter of this year, putting the country on the verge of recession.
On Monday, the OECD warned the 17 eurozone countries are heading for recession in the fourth quarter of this year, although the Dutch economy will grow 0.3% next year, the Paris-based organisation said.