Financial jitters leave Dutch unscathed

Dutch economic growth will slow to 2.3% this year and 1.8% in 2009, according to the latest estimates from International Monetary Fund.

In addition, the widening credit crisis could also hurt the economy although the ‘financial jitters’ have not dented macroeconomic performance so far, the IMF said at a briefing in the Hague on Monday.
The IMF pointed to the Dutch economy’s strong foundations which it said had so far shielded it from financial turbulence. Growth, at 3.5% last year, is among the highest in Europe while inflation is among the lowest.
In particular, the IMF singled out continuing mortgage tax relief for criticism. The Netherlands has one of the most generous systems in Europe. Spokesman Lorenzo Figlinoli told the Financieele Dagblad that action was needed because the tax break was stimulating house prices and making households more vulnerable to interest rate swings.
News agency Reuters reported finance minister Wouter Bos as saying that the credit crisis could have a domino effect which may spill over into the Netherlands. Nevertheless, the Dutch economy did not face any major risks, he said. ‘The US will probably head into a recession but absolutely not the Dutch economy,’ Bos told NOS tv.
Meanwhile, the national statistics office CBS reported that the Dutch trade surplus reached €3.1bn in January, compared with €3.3bn in December 2007. Exports were up 10% on January last year, while imports rose 8%.

For the IMF summary, click here

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