Dutch Planning Bureau Raises Economic Growth Forecasts

(RTTNews) - The Netherlands' economy is set to grow faster than expected earlier this year and next, supported by consumption, investments and exports, the government agency Central Planning Bureau said Wednesday.

The CPB raised the growth forecast for this year to 2.4 percent from 2.1 percent seen in March. The projection for next year was boosted to 2 percent from 2.8 percent.

This compares favorably with the expected moderate structural growth, the agency said.

"The green lights for the Dutch economy may turn to yellow, if international uncertainties change into setbacks," the CPB added.

Such uncertainties include the outcome of the Brexit talks, the financial stability of some countries in Southern Europe, the policy directions in the US and China.

Stronger growth is expected to create more employment that is seen to boost disposable income and consequently, raise spending.

"Purchasing power is expected to increase, slightly, in both years," the CPB said.

"With regard to the rising investment levels, the housing market is still in the lead, and exports will profit from favorable international developments."

The unemployment rate is forecast to ease sharply to 4.9 percent this year from 6 percent in 2016. The figure is seen dropping further next year to 4.7 percent.

The CPB trimmed its inflation projection for this year to 1.4 percent from 1.6 percent. The outlook for next year was retained at 1.4 percent.

The country is set to have a budget surplus of 0.5 percent of GDP this year versus 0.4 percent in 2016. The figure is forecast to rise to 0.7 percent next year.

The government debt is projected to fall to 58.5 percent of GDP this year from 62.2 percent last year. The ratio is seen dropping further to 55.4 percent next year.

Thus, the Netherlands is set to have both its budget deficit and debt within the Maastricht Treaty targets of below 3 percent and 60 percent, respectively.