First signs of economic recovery (new)

The cabinet on Wednesday warned against too much optimism about the economy following new figures from the government’s macro-economic think-tank CPB which indicate that the economy is not expected to shrink further next year, reports the Telegraaf.

New CPB figures leaked by the press on Tuesday evening indicate that the economy will show zero growth in 2010 rather than the 0.5% further contraction forecast in June. The economy is expected to shrink by 4.75% this year.
The press has widely welcomed the new prognosis as the first small signs of recovery.
Finance minister Wouter Bos told the Telegraaf on Wednesday that the situation remains ‘dreadful, but slightly less dreadful’. He warned that people should not forget that problems still exist.
‘Over 600,000 unemployed, that still means it is a drama for many families,’ he is quoted as saying.
His sentiments were echoed by other ministers who met for the first time following the summer recess on Wednesday to discuss ways to tackle the recession and plans for next year’s budget.
The CPB statistics are the basis for the cabinet’s discussions which will continue in the coming weeks. The budget will be presented to parliament on September 15.
Unemployment figures more favourable
In its latest forecast the CPB expects 615,000 people (8% of the working population) to be unemployed next year, report various media. In June this was expected to be 730,000. The prognosis for this year is 410,000 (5% of the working population).
The budget deficit next year is expected to be 6.3% of gross national income (around €38bn), a half percentage point lower than forecast in June, the papers say. The shortfall this year is put at 4% according to the CPB’s latest calculations.
The starting point for the budget talks is that every ministry will be responsible for finding a solution for its own financial shortfall, reports Wednesday’s Volksrant. The health ministry in particular has overspent considerably this year, the paper says.

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