Wednesday 22 January 2020

Dutch central banker repeats call for wage hikes to boost spending

Klaas Knot Photo: DNB

Dutch central bank DNB president Klaas Knot has repeated his call for stronger wage increases to boost spending.

Speaking on Friday ahead of the IMF meeting in Washington, Knot said Dutch unemployment was falling rapidly but wages are failing to keep pace with other countries, the Financieele Dagblad reported on Monday.

Knot warned that the Netherlands would draw a lot of criticism from abroad unless the situation is changed. He urged unions to place more emphasis on wages in their demands during negotiations with employers.

The DNB president said higher wages would serve to increase domestic spending and curb  inflation. Moreover higher wages would reduce corporate profit. Knot said there were too few investment opportunities in the Netherlands so corporate profits are being spent abroad.

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