More bad news: CPB sees economy contracting 0.5% in 2013

The government’s macro-economic planning agency CPB expects the Dutch economy to contract by 0.5% next year, a similar forecast to last week’s announcement by the central bank.

The CPB figures are used by ministers to determine policy and also suggest the budget deficit will be 3.3% next year, above eurozone rules. In September, the CPB put the budget deficit in 2013 at 2.7%.
The change is due to revised estimates of income tax receipts and a deterioration in economic conditions elsewhere, the CPB says. The institution had forecast economic growth of 0.75% next year.
However, the economy will begin to pick up in the second half of next year, after 18 months of downturn, the CPB said.
Last week, the central bank issued its own forecasts, saying the economy will shrink by 0.6% next year.
Finance minister Jeroen Dijsselbloem said the new forecasts are worrying but no reason to take immediate action. In particular, they show the recovery is taking more time than expected.
The cabinet will look again at the option of taking new steps next spring, on the basis of the CPB figures issued then, the minister said. ‘Then we will see where we are and what is necessary,’ he told Nos television.
Main conclusions, in English
Earlier stories
Central bank sees further economic decline, government stands firm

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