Budget deficit forecast to reach 2.2% next year, says CPB

The Dutch economy will grow by 1.75% this year while the budget deficit will fall to 3.7% this year and 2.2% in 2012, according to the latest estimates from the government’s macro-economic policy unit CPB.

Unemployment is set to fall to 4% by the middle of next year, the CPB said. However, inflation and government policy will lead to a 2% drop in spending power for most households, the CBP said.
The fall in the budget deficit is ‘exeptionally and historically fast,’ CPB director Coen Teulings said at the presentation of the figures.
Political decisions
But he declined to say if the drop is due to government efforts to cut spending and generate savings of €18bn. ‘I am not involved in the speed the savings are made at… that is a political decision,’ he was quoted as saying by news agency ANP.
One risk for the continued economic growth is high oil prices, Teulings said. The price of oil is currently $15 higher than the CPB had expected and over two years this will cut 0.7 of a percentage point from the growth figure, he said.
Labour’s finance spokesman Ronald Plasterk said in a reaction that the government should be embarassed about the effect of its policies on ordinary citizens. ‘Pensioners on low incomes are being hard hit while high earners are relatively unscathed. And it will only be worse next year,’ he said.

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