The 2013 budget put together by the minority coalition and three other parties will be enough to bring the Dutch budget deficit to below 3% in 2013, the macro-economic forecasting agency CPB said on Thursday.

According to CPB calculations, 2013’s budget deficit will be 2.9%, just under EU demands. Most of the improvement comes not from budget cuts but from tax increases, reports NRC.
The CPB expects economic growth to be 0.75%, lower than the earlier forecast of 1.25%. It also expects unemployment to grow from 5.25% this year to 6% in 2013. Unemployment will only fall back to 2011 levels in 2017.
The 2013 budget will see spending power fall by 0.75%. That is more than originally expected and is the result of higher inflation and the salary freeze in the public sector. It will be the fourth year in a row that people have less to spend, says news agency Novum.
The uncertainty about the prognoses is striking, says NRC. ‘The CPB assumes politicians and central bankers will prevent a further escalation of the eurozone crisis, keeping monetary union and the internal market intact.’
Happy
Commenting on the CPB’s findings, finance minister Jan Kees de Jager said he is happy with their conclusion that the budget deficit will hit the EU norm. However, he was at pains to point out that the interests of the Netherlands are central to the five-party budget agreement.
‘We are doing this to strengthen the economy, to improve government finances and to retain the confidence of the financial market,’ De Jager told the Telegraaf.
For the coming four years, the CPB expects average annual growth of 1.5%, with the budget deficit falling to 2.6% by 2017. But the organisation warns that any government that wants to keep the deficit stable will have to find €25bn of savings in 2017.