Dutch govt. debt €32 billion lower than expected

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The Dutch government debt was 32 billion euros lower than expected at the end of 2016, according to the Annual Financial Report Finance Minister Jeroen Dijsselbloem presented to the senate and lower house of parliament on Wednesday, ANP reports.

Government debt amounted to 434 billion euros at the end to 2016. That comes down to to 62.3 percent of the gross domestic product and about 26 thousand euros per Dutch person. The EU standard is that government debt must be below 60 percent of GDP. The expectation is that the Netherlands' debt will fall to just below that limit this year and decrease even further next year.

The government debt is shrinking faster than expected due to higher revenues from the sale of state property and a few other windfalls. The first share of insurer ASR went to the stock market for 1.1 billion euros last year. The second part of the government's interest in ABN Amro generated 1.3 billion euros on the stock market. And the sale of Propertize, SNS's former property branch, brought in nearly 0.9 billion euros.

Last year the government had more income than expenses for the first time since the outbreak of the economic crisis in 2008. This resulted in a budget surplus of 2.9 billion euros. This can mainly be attributed to higher than expected income from taxes and premiums. The government also spent less than budgeted. 

The Dutch economy grew by 2.2 percent in 2016, the highest growth since 2008. The number of unemployed people decreased by 75 thousand and the unemployment rate dropped to 5.4 percent of the working population - the lowest level since end 2011. 

The housing market also showed improvement. The number of home sold reached a record height and the proportion of people whose mortgage debt is higher than the value of their home, dropped. Last year 17.6 percent of people had a so-called underwater mortgage, compared to 25.6 percent at the end of 2015. 

The Tweede Kamer, the lower house of parliament, will debate this Annual Financial Report on May 31st.