Economic growth will be slower next year due to second coronavirus wave: CPB

The Dutch economy will contract 4.2% this year, slightly less than expected, the government’s macro-economic think-tank CPB said in its latest forecasts. In September, the CPB said a contraction of 5% was likely.

However, the CPB said, the second coronavirus wave will mean the recovery next year will be slower than forecast earlier. It put growth at 2.8% next year, compared with 3.5% in earlier forecasts.

Unemployment will increase to more than 6% in 2021, affecting particularly young people, employees on a flexible employment contract and self-employed contractors, the CPB said.

However, the economic recovery very strongly depends on how the pandemic will develop, the agency said.

‘The second coronavirus wave does not lead to a fundamentally different economic outlook for 2021,’ CBP director Pieter Hasekamp said. ‘However, certain sectors, such as the hospitality industry, culture and tourism, will once again be severely affected by new physical contact restrictions.

The government’s support packages are keeping pace with economic development, he said. ‘From the perspective of economic stabilisation, therefore, there is no reason to reconsider phasing out of support,’ he said. ‘Although, there may be other reasons for helping such affected sectors; such support preferably should be temporary and targeted.’