Dutch economic growth to exceed 3 pct for first time since crisis: planning office

The Dutch economy continues to grow steadily and its growth is expected to reach 3.3 percent this year, according to planning office CPB's estimate in its Macro Economic Exploration, which was published on Wednesday. If this estimate holds true, this will be the first time the Dutch economy grows by more than 3 percent since the outbreak of the economic crisis in 2007. In 2018 the gross domestic product is expected to grow by 2.5 percent, NU.nl reports.

The figures in this estimate is more positive than in the previous CPB forecast in June. This is mainly due to exports, which is expected to increase by 4.9 percent this year, instead of the 4.2 increase expected in June. Next year exports will increase by 4.3 percent. The rosy outlook can also be seen in the falling unemployment. CPB expects that by the end of this year 4.9 percent of the working population will be unemployed, and next year that will fall to 4.3 percent. 

Inflation will amount to 1.4 percent this year and next year, slightly lower than the previous estimate due to the falling oil price. Due to tightness on the labor market, the CPB expects that salaries will rise. But this trend will only be seen next year. Purchasing power will increase by 0.3 percent this year, the same as in the previous estimate, and 0.5 percent next year, compared to 0.2 percent in the June estimate. 

People with high incomes will see the biggest purchasing power increase at 1.1 percent, low incomes will see the smallest at 0.6 percent. The middle class can expect purchasing power to increase between 0.6 percent and 0.9 percent. 

The public finances are doing well, despite an extra 400 million euros earmarked for nursing home care next year. There is expected to be a budget surplus of 0.6 percent of GDP this year and 0.9 percent next year. The government debt forecast is 54 percent of GDP, the same as in the June estimate. 

At the request of Gerrit Zalm - the mediator in the ongoing government formation negotiations - the CPB also looked further ahead and published estimates for 2018 to 2012, the four years in which the new cabinet will rule. In that period the economy will grow an average of 1.8 percent per year, according to the CPB. Unemployment is expected to drop to 4.6 percent in 2021. And public finances will also be doing better - the budget surplus will rise to 1.6 percent of GDP in 2021 and government debt will drop to 45 percent of GDP. 

The departing government is pleased with the economic developments, according to the newspaper. Finance Minister Jeroen Dijsselbloem said that the reforms of past years are now paying off. He repeated his mantra that the good times must be used to build buffers for the future - the government must continue reforms instead of spending extra money now. Minister Henk Kamp of Economic Affairs said that he hopes the new cabinet will deal wisely with the extra financial room.