Spending power and poverty will rise next year, says CPB

Photo: Depositphotos.com
Photo: Depositphotos.com

The Dutch will have some 2% more to spend in 2024 on average but poverty will increase at the same time, the government’s economic policy think tank CPB said in its March forecasts.

Although energy prices have fallen sharply in recent months, inflation has now spread to other goods and services, the CPB points out. And although wages are rising, purchasing power will remain largely unchanged this year.

Next year, however spending power will rise again, but so will the number of people living on or below the breadline. The CPB expects 5.8% of the population to live in poverty next year, as temporary support measures, such as the energy price cap, are phased out.

In 2022 and 2021, some 4.7% of the population were said to live in poverty, defined by the CPB as a ‘modest but adequate’ amount of €1460 for a single person.

The CPB sees the economy growing by 1.6% and 1.4% respectively in 2023 and 2024, despite inflation, weaker international trade and falling house prices. The labour market is projected to remain tight, with unemployment rising only slightly to 4.1% in 2024.

‘We see a recovery in purchasing power now that inflation is falling, and wage growth is picking up,’ said CPB director Pieter Hasekamp. Inflation is set to hit 3% this year and 3.1% in 2024.

‘But the number of people living below the poverty line is set to rise again next year due to the ending of temporary government support,’ Hasekamp said. ‘We also see the government deficit continuing to rise in the years ahead. That calls for much more targeted support than is currently the case.’

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