Dutch economy to continue growing, but slower than expected

Euros
Euros. Photo: Europa credito urgente / Wikimedia Commons

The Dutch economy will continue growing this year and next year, though a bit slower than expected, central planning office CPB said on Thursday. The CPB expects 2.8 percent growth in 2018 and 2.6 percent in 2019, instead of 2.9 percent and 2.7 percent as the office expected in June, NU.nl reports.

The CPB experts is still pleased with the stance of the economy, speaking of a "favorable development". The economy will grow above average in 2019, just like in 2017 and 2018. This is thanks to household consumption, government spending, exports and business and residential investments.

"A beautiful summer, also economically", CPB director Laura van Geest said, according to the newspaper. The economy continues to grow and unemployment continues to decline. "But it is not just sunshine. Uncertainties surrounding the Brexit, U.S. trade policy and economic policy in Italy can tilt the picture."

According to the CPB, almost all households in the Netherlands will have more to spend next year. There is a positive purchasing power development, with outliers above 4 percent. Inflation is rising due to higher labor costs and the increase of the low VAT rate, but due to measures from the Rutte III government agreement, purchasing power will also increase - by 0.4 percent in 2018 and 1.3 percent in 2019. The CPB expects unemployment to fall to an "historically low" level of 3.5 percent of the labor force next year. 

Although the government is spending more, there is still a budget surplus thanks to positive economic developments, the CPB said. Government debt will drop to 49 percent. 

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