The Dutch economy is poised to grow by 2.1% this year and 1.8% in 2018, the government’s macro-economic think tank CPB said on Friday in a new report.

Both years will show a budget surplus and unemployment will continue to fall, the CPB said. Earlier on Friday, national statistics office CBS said the government booked a budget surplus of nearly €3bn last year, the first surplus since 2008.

The budget surplus figures are welcome news for the next government and clear the way for new spending initiatives.

Both unions and employers were quick to stake their claims. The FNV, the country’s biggest trade union federation, says the money should go on softening the impact of the rising state pension age on people doing hard physical labour.

Employers organisation VNO-NCW says the new cabinet should invest heavily in future-proofing the Dutch economy by stimulating the development of the circular economy, plus energy efficiency and digitalisation.

Exports

Several areas will help drive forward growth. ‘Exports will continue to do well, and companies will increase their investments,’ the CBS said. In addition, household spending, investment in housing and government spending will have a positive impact.

Higher energy prices will help push up inflation to 1.6% this year and 1.4% in 2018. This means the increase in spending power will be lower this year and in 2018 than it was in 2016.

Previous policy

However, the CBS points out the figures are based on previous government policy and do not take any changes the new administration is likely to implement into account.

In addition, elections in several EU member states, Brexit and uncertainties about US trade policy and financial regulation will have an impact.

‘Growth figures of 3%, 4% or even 5% are a thing of the past,’ CPB director Laura van Geest said. ‘Lower growth is the future, not only for the Netherlands, but also for many other western countries. This is the result, among other things, of population ageing and declining productivity growth. Stimulating potential growth is an option, but it can be intractable.’