Dutch economic growth best in decade says Central Bank; Wages still too low
The Dutch economy will grow by 2.5 percent this year - the highest growth in a decade, Dutch central bank DNB expects. The economy is doing better in all aspects, but wages are still lagging behind, the bank said in its latest estimate on Monday, NOS reports.
DNB's expectations are rosier than the central planning office CPB's estimates in March. The CPB then predicted economic growth of 2.1 percent. The office is releasing its latest estimates on Wednesday. The Dutch government uses CPB estimates to make its policy.
According to DNB, the Dutch economy is improving on all fronts. Consumers are spending more, companies are investing more and exports are increasing thanks to the increasing world trade. The labor market continues to recover and unemployment will drop to 4.4 percent in two years, DNB expects.
The recovering labor market would usually mean faster raising wages, but that does not seem to be happening now, the bank said. "The wages are going up, but it should be more", DNB director Job Swank said, according to NOS. The bank is working on figuring out why wages are lagging behind in their recovery, and what this will mean for the economy.
According to DNB, faster rising wages at this stage will help increase inflation, which in turn would help the Dutch economy. During times of low price increases, or even decreases, consumers tend to postpone purchases.
The Dutch economy is "very healthy" in itself, according to the bank. All threats it currently faces come from abroad. "The consequences of the Brexit and possible protectionism from the United States could have a negative impact", Swank said.