Dutch economy growth and the lowest unemployment rate since 2001 forecast
According to the latest forecast from CPB Netherlands Bureau for Economic Policy Analysis, the Dutch economy is gathering steam and is expected to grow by 3,2 percent in 2018 and a further 2,7 percent in 2019.
Dutch economy booming
The Forecast Central Economic Plan 2018 by the CPB estimates how the Netherlands will fair economically this year as well as the coming year. Estimations have been made based on a mild Brexit, where a trade agreement is reached. Should the situation turn out otherwise, it could be damaging to the Dutch economy.
According to the CPB’s report, the Dutch economy is expected to grow by 3,2 percent in 2018 and another 2,7 percent in 2019. Such growth means that the Netherlands will surpass Eurozone economy growth by 0,6 percent for the 2017-2019 period.
The reasons for the economic boom in the Netherlands include low-interest rates, a favourable international economy, a strong Dutch housing market and expansive budgetary policy.
Despite the growing economy, it is not anticipated that the governmental surplus will improve. Last year, the Dutch government had a surplus of 1,1 percent. This year, a surplus of 0,7 percent GDP has been forecast, and in 2019, a surplus of 0,9 percent GDP is expected. The lower governmental surplus in 2018 and 2019 is principally due to higher spending by the government.
Unemployment in the Netherlands to decrease
The report also gives good news for those without a job in the Netherlands, as it predicts a decrease in unemployment from 4,9 percent to 3,9 percent this year and 3,5 percent in the following year. The unemployment rate in the Netherlands in 2019 will thus be the lowest it has been since 2001.
The decrease in unemployment rates will make it more difficult for businesses to find employees, and as a result, they will offer more permanent contracts and may be prepared to pay higher wages to attract staff and retain them.
More purchasing power for households in the Netherlands
The CPB forecasts an increase of 1,6 percent in the average purchasing power for all households by 2019. The increase in purchasing power will affect certain households differently.
Those receiving welfare benefits will only experience a 0,8 percent increase in purchasing power, whereas those in employment will see an increase of 1,8 percent and those receiving a pension will notice a 1,3 percent increase.