Dutch economy grows at strongest rate since financial crisis
The Dutch economy will grow by 3.1 percent next year, according to the Netherlands central planning office for economic policy CPB. "Such growth percentages have not occurred since 2007", CPB said, NU.nl reports. "Because of the persistently high growth, there will be a boom in the coming year."
In its previous forecast, in the Macro Economic Outlook for Budget Day, CPB expected economic growth of 2.5 percent in 2018. The economic growth for this year will reach 3.2 percent, according to the office. In the coming year the Dutch economic growth will be broadly supported by business investment, household consumption, investment in housing, and exports.
Helped by growing employment opportunities, unemployment will fall to 3.9 percent of the labor force - the lowest level in 10 years. "Because of the tight labor market, companies pay more wages to attract staff, or to be able to retain people", the CPB said. This also results in households having more to spend.
According to the CPB, the government also plays an important role in boosting the economic growth by increasing government spending. This year government spending increased by 0.4 percent, next year it will increase by 3.5 percent.
A risk to the economic growth is if the wage increase is lower than expected. "The recent past shows that a recovering economy with a tightening labor market does not directly translate into higher wage increases." International growth like the growth of the Chinese economy, the Brexit, and the monetary policy of the ECB may also pose a risk to the Dutch economy's growth.
Earlier this week Dutch central bank DNB also released its forecast for economic growth in the coming year. The bank expects economic growth of 3.3 percent this year and 3.1 percent next year.