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Dutch budget deficit to 2,7 percent, some growth recovery in 2013

CPB Netherlands Bureau for Economic Policy Analysis (CPB) expects the 2013 budget deficit (EMU balance) to be 2,7 percent, or 17 billion Euros. In 2013, the Dutch economy recovers slowly, with a modest growth of ¾ percent of Gross Domestic Product (GDP), after a decrease of ½ percent in 2012.

This was announced today by CPB through the publication of the draft-figures of the Macro Economic Outlook 2013.

In 2012 the Dutch economy develops more positively than previously expected, as is shown by recent data on the first two quarters from Statistics Netherlands. Both exports and government expenditure have grown more than expected in the most recent June forecast, although household consumption has been decreasing more. This leads to a more limited decrease of GDP than earlier forecasted. The 2012 inflation rate will be 2¼ percent and median purchasing power is down by 2 percent. For 2013 these numbers are 2 percent inflation and ¾ percent less purchasing power, respectively.

The forecasted budget deficit (EMU balance) will be 2,7 percent GDP in 2013. This is a bit better than the expected 2,9 percent deficit previously projected. The main reasons for this change are higher income from healthcare premiums and the upward adjustment of the EMU balance of local governments (mainly municipalities and provinces) in 2011. On the other hand, natural gas revenues have been lower due to the lower oil price. Unemployment will grow in 2013, likely to an annual mean figure of 6 percent, or 515.000 persons.

These are draft figures for the Macro Economic Outlook 2013, which includes forecasts for 2012 and 2013. The numbers released today can still change before final publication on parliamentary Budget Day (‘Prinsjesdag’, 18 September).

CPB Netherlands Bureau for Economic Policy Analysis will not comment on these draft figures besides this press release. Please note that these new figures were not used for the calculation of the effects of the election manifestos, to be published on Monday, 27 August. This is inevitable but without difficulty, given the limited effect of these new figures on those calculations.