Economic growth set to fall next year

The Dutch economy is set to grow 2.25% in 2008, compared with 3% growth this year, according to the latest estimates from the government’s economic policy unit CPB.

During the budget presentation in September, the CPB forecast that the economy would grow by 2.75% next year. The slowdown is due to international developments, it said on Thursday.
However the estimates are subject to greater uncertainty than normal because of unrest on the international financial markets, the CPB said.
Pressure in the labour market will also go up, with job vacancies increasing and the unemployment rate continuing to fall. The country’s jobless figure is currently 4% which is below the level in which the jobs market is said to be balanced, CPB economists said.
In addition, the shortage of workers will force up wages by 2.25%. The cost of employment has risen by 1.5% this year.
However, despite all the negative news, government finances are still on target to produce a 0.5% surplus next year.
Meanwhile, the national statistics office CBS said on Thursday that inflation rose slightly to 1.9% in November, driven by higher fuel and food bills. The Netherlands still has the lowest inflation in the eurozone.

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