Key government forecaster puts deficit at 3.7%, cuts inevitable

The government’s key macro-economic forecasting agency CPB expects the Dutch budget deficit to reach 3.7% next year, well above the eurozone limit of 3%.

This makes it increasingly likely the government will be forced to implement a new austerity drive in August. The leaders of the two ruling parties said earlier on Thursday they expect a package of cuts and taxes to generate €6bn will be on the cards.

The CPB was due to publish its crucial forecasts on Friday but the figures were leaked earlier to RTL news. Earlier this week, the central bank put next year’s budget deficit at 3.9%.

August deadline

The decision on whether or not to impose extra cuts will be formally taken in August. Ministers agreed with unions and employers earlier this year to hold off on implementing a €4.3bn austerity package until after the summer break.

The new CPB forecasts also show that unemployment is rising quickly and the situation is now similar to the 1980s, RTL news reported. By the end of next year, the jobless total will have reached 635,000 people, or 7%.

The CPB also says wages will rise less than inflation and that spending power will be down 1.25% on average over 2013 and 2014.

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