If the US credit crisis results in Dutch economic growth slowing to 1.5%, jobs growth at small and medium-sized firms will stagnate, says small firm association chairman Loek Hermans.

‘The cabinet has to take action to stimulate economic growth now,’ Hermans was reported as saying by news agency ANP. In particular, plans to raise VAT to 20% in 2009 should be abandoned.
The cabinet still says the economy will grow 2.5% this year, leading to 40,000 new jobs. But central bank president Nout Wellink says growth is likely to drop to 1.5% because of the turmoil on the financial markets.
Research institute EIM says that only 38% of companies are positive about the economy, although they remain optimistic about their own fortunes. Order books are full and profits should remain on course in 2008, firms say.