Tight labor market pressuring Dutch economic growth: IMF

The severe shortage in the labor market is putting pressure on the growth prospects of the Dutch economy. The energy transition and further digitalization are also at risk of being affected by staff shortages, researcher Bernardin Akitoby of the International Monetary Fund (IMF) warned ANP.

“The labor market is very tight, with shortages in all sectors and one of the highest percentages of vacancies in the eurozone,” he said from Washington when asked. The IMF presented new growth prospects there last week. The Netherlands, and other European countries, seem to be heading for several years with relatively little economic growth.

According to the IMF, our economy will grow by 0.6 percent and 1.6 percent this year and next year, respectively. In 2026, growth will probably be barely stronger at 1.7 percent. For 2029, the fund’s experts expect 1.4 percent growth for the Netherlands.

Earlier this year, Akitoby was the chief researcher of an IMF research mission to the Netherlands. At that time, he warned that the major shortage of workers in healthcare and technology, for example, is likely to increase further in the coming years due to the aging population.

Over half a year later, the researcher still sees the labor market as one of the most important points of attention for the Netherlands. According to Akitoby, it is first and foremost important to make better use of the workers we have in the Netherlands. He advises encouraging part-timers to work more hours.

Dutch women, in particular, should be encouraged to work more hours, he said, This could be done, for example, by making childcare more accessible and improving elderly care, making it easier for women to spend more time on work.

Akitoby also emphasized the importance of good retraining opportunities for workers, so that people can more easily switch to another job if necessary. He also recommended “using technology and optimal migration to expand the labor supply.” Akitoby did not say exactly what he meant by the latter.

Earlier this year, he already showed himself to be in favor of labor migration in sectors where there are shortages, but at the same time avoided politically sensitive questions about the migration file. In general, the IMF believes that the rise of artificial intelligence (AI) can help to work more efficiently.