Agency: Dutch economy growing faster than expected

Economy
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The Dutch economy is growing faster than expected and is continuing to recover despite the lower gas production. The Dutch economy is expected to grow 2.0 percent this year and 2.4 percent next year. Unemployment is expected to decrease to 6.7 percent next year and the government deficit to 1.5 percent of the gross domestic product.

This is according to a preliminary estimate the Central Planning Bureau released on Tuesday. The purpose of this estimate is to help in the finalization of decisions on the draft budget and tax plan for 2016, which will be presented on Prinsjesdag, or Budget Day, in September.

Despite the slowing world trade in the first quarters of 2015, world trade relevant to the Netherlands is being carried by robust growth in Europe and the United States. The CPB expects that the relevant world trade will recover during the rest of this and next year and amount to 2.8 percent in 2015 and 5.4 percent in 2016.

Domestic spending also plays an important role in the Dutch economy's growth. Household consumption is benefiting from the growth of real wages and the additional tax cuts next year. Investment in housing and other assets are improving. However, the reduction of gas production in Groningen is having a depressing effect on the growth, and this has been worked into the CPB's estimate.

The government deficit is expected to fall to 2.1 percent of GDP this year and to 1.5 percent of GDP next year. The structural deficit will increase from 0.8 percent of GDP to 1.1 percent of GDP.

The improving economy is also increasing employment this year and next year. Employment in the private sector is expected to grow by 1.0 percent this year and 1.3 percent next year. Unemployment is expected to decrease to 620 thousand in 2015 and 600 thousand in 2016. Inflation in the Netherlands will increase to 1.1 percent next year.

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