Dutch deficit lower than expected
The 2015 budget deficit is 0.1 percent lower than expected in the Budget Memorandum 2015 and amounts to a deficit of 2.1 percent of the gross domestic product. This is due to the influence of favorable economic developments, lower expenditure on social security and healthcare, lower interest expenses and a higher revenue.
This is according to the Spring Memorandum 2015, the Dutch central government announced on Monday. The EMU-debt, the debt of the collective sectors of all countries participating in in the European Monetary Union, is also better than expected. The EMU debt is expected to reach 68.6 percent of the GDP - an improvement of 1.4 percent compared to the expectations in the Budget Memorandum.
In the latest Central Economic Plan, the Dutch Planning office estimates the economic growth for 2015 at 1.7 percent, instead of 1.25 percent. Factors contributing to the economic growth in 2015 include exports growing faster in 2014 due to the depreciation of the euro and the recovering world trade, low inflation and the decreasing unemployment rate.
Windfalls are created in the expenditure by fewer unemployment benefits being paid, lower expenses on childcare allowances and more being spent on medicines and medical devices. There are however setbacks as a result of more asylum seekers, a higher number of pupils and students and a greater reliance on housing benefits in 2014.
With the revenues, windfalls are created in 2015 by corporation tax and dividend tax due to businesses' improved profitability. Income from natural gas has been reduced by macroeconomic developments and volume restrictions And an amount of 76 million euros has been reserved for this year for the further elaboration of the Tax Administration's Broad Agenda.