Sunday 12 July 2020

The Dutch should be investing more in their economy, says IMF

The Netherlands should invest more in itself in order to sustain growth in the longer term and take advantage of the healthy government finances, according to a new report on the Dutch economy by the International Monetary Fund.

At a briefing following the report’s presentation, IMF economist Thomas Dorsey suggested an extra impulse of 0.5% of GDP in the form of tax cuts and extra spending on education and innovation.

‘The buffers are growing quickly,’ Dorsey is quoted as saying by the Financieele Dagblad. ‘At the current pace the Dutch national debt will quickly fall from 57% now to 42% in 2023… Even with extra government stimulation of 0.5% a year, the Netherlands would still retain a substantial safety margin.’

In particular, the Netherlands should bring in policy ‘aimed at reducing dualism in the labour market and supporting wage growth,’ the IMF report said, referring to the rise in self-employment in the Netherlands.

Furthermore, therapid increases in house prices’ and high levels of mortgage debt ‘reflect structural weakness in the Dutch housing market’. The IMF again said that the maximum amount people can borrow should be reduced below 100% of the value of the property.

This, it says, remains high by international standards and a cut would reduce household financial vulnerabilities.

Read the IMF report

Thank you for donating to DutchNews.nl

The DutchNews.nl team would like to thank all the generous readers who have made a donation in recent weeks. Your financial support has helped us to expand our coverage of the coronavirus crisis into the evenings and weekends and make sure you are kept up to date with the latest developments.

DutchNews.nl has been free for 14 years, but without the financial backing of our readers, we would not be able to provide you with fair and accurate news and features about all things Dutch. Your contributions make this possible.

If you have not yet made a donation, but would like to, you can do so via Ideal, credit card or Paypal.