Key figures Prinsjesdag leaked
The Dutchman loses an average of 0.5 percent of their purchasing power next year. The growth of the Dutch economy will average 0.5 percent, while the budget deficit will average 3.3 percent in 2014.Unemployment rises to 7.5 percent according to the CPB definition (9.25 percent according to the CBS definition).
This is clear from estimates of the Central Planning Bureau (CPB), published on Sunday after they leaked through RTL Nieuws.
The so-called Macro Economic Outlook is normally published on Budget Day, next Tuesday, and is a calculation based on the Budget Plans of the Cabinet.
The decline in purchasing power is relatively speaking not too bad, even though it's added on top of this year's decline of 1.25 percent. In the estimate of August, the CPB assumed a constant purchasing power, but the effects of the proposed 6 billion euro cuts were excluded.
Nibud did not want to respond to the leaked numbers on Sunday. The Institute first wants to have access to all the data.
Economic growth falls even further compared to previous estimates, largely the result of the billions in cuts that the government plans to execute next year. This spring the economic growth for next year was anticipated to be 1 percent, now it's estimated on 0.5 percent.
The deficit exceeds the EU standard again this year and averages 3.2 percent. That is, again, slightly higher than the CPB calculation of last month. The government agreed with Brussels to cut down six billion this summer and keeps it at that.
The debt rises further next year, to 76.3 percent. According to European agreements it should actually be below 60 percent. The scope of collective responsibilities as part of the gross domestic product also increased further, to 40.8 percent.
This past August the Central Planning Bureau figured the budget deficit would be 3.9 percent in 2014, and growth would amount to 0.75 percent. However, the new spending cuts were not included. These have a negative impact on economic growth.
Pensioners and sole breadwinners will sacrifice the most next year 1.5 percent less spending power, as shown by the Macro Economic Exploration.
The spending power will remain the same for the working class, decrease by half a percent for benefits recipients. People without children are better off than parents. For the first group purchasing power remains the same, for people with children it decreases by a quarter percent.
Households continue to spend less next year and the slump in the housing market is not over. However, housing prices stabilize in the second half of 2014. Investments in the housing market will increase next year by 1.5 percent, after they fell eight percent in 2013 .
The new forecasts for unemployment confirm the FNV fears that the additional cuts are disastrous for the country. This underscores what we fear. It also indicates that our actions against the cuts are justified, according to a FNV spokesperson Sunday in response to the new predictions.
Last week the FNV announced it would discuss actions against the government's plans with its members. In any case there will be a national campaign on November 30th.
CPB is probably too optimistic in its predictions about the effects of the new austerity package, suggested economist Bas Jacobs of the Erasmus University Rotterdam Sunday in a first response to the new CPB estimates.
The CPB has systematically overestimated the growth in recent years and Jacobs expects the estimates of growth, consumption, investment, and unemployment are also optimistic. The economist pointed out that the total package of spending cuts of 12 billion is hardly less than last year's.
CPB itself warns of possible shortfalls in consumption. Those have always occurred in the last few years. Jacobs anticipates those setbacks and expects unemployment to continue rising more than already predicted.
Jacob's colleague, Professor Sylvester Eijffinger (Tilburg University) pointed out the dire consequences of lower growth for the government deficit. Lower growth means less tax revenues, while spending on benefits increase, for example. As a result, the deficit will be higher next year than currently predicted. That will lead to more cuts and slowly but surely escalate into a vicious circle, where you keep cutting without decreasing the deficit.
According to the Tilburg economist , the problem can only be solved by structural reforms of the housing market, for example, pensions, and the labor market. That is also Brussels' goal, but then VVD and PvdA need to both agree on main issues and that they do not.