CPB more optimistic about Dutch economic growth, warns on wages

The government’s macro-economic forecasting agency CPB on Wednesday raised its economic growth forecasts for the Netherlands to 2.4% this year and 2% in 2018, up slightly on its preliminary forecasts.

World trade is developing positively and the Netherlands as an open economy is benefiting, the CPB said. Consumer spending is rising because more people have a job and that is boosting average incomes.

Next year, the unemployment rate will drop to 4.7%, the CPB said.

The CPB’s forecasts come just two days after the Dutch central bank said the economy will grow at its fastest rate for a decade, but that wage rises are lagging behind. The bank expects growth of 2.5% this year.

The CPB too warned that wages are lagging, but said this is partly due to the number of people on short term or temporary contracts.

Green light

In addition, ‘the green light for the Dutch economy may turn to amber, if international uncertainties change into setbacks,’ the CPB said.  Uncertainties within Europe include the results from the Brexit negotiations and the financial stability of certain southern European countries.

Outside Europe, the course steered by the United States and China’s economic developments also remain important factors, the CPB said.

The CPB’s forecasts form the basis of the government’s spending plans for 2018, which will be published in September.