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Dutch thinktank forecasts stable recovery from recession

Xinhua, March 7, 2016 Adjust font size:

With a growth of 1.8 percent this year the Dutch economy is recovering from the recession and the euro crisis, the Netherlands Bureau for Economic Policy Analysis (CPB) announced in its projections published on Monday.

The projected growth is less than the 2.1 percent expected in the previous forecast of December 2015. For 2017 the growth is estimated at 2.0 percent. In 2014 the growth was 1.0 percent and 1.9 percent in 2015.

"We are on the right track but there is still work to be done," Finance Minister Jeroen Dijsselbloem reacted in a statement. "The growth remains broadly supported by both domestic demand and exports."

Inflation in 2016 will be low with 0.3 percent, due to lower oil and resource prices, and is projected to increase next year to 1.0 percent. The government deficit is projected to drop to 1.7 percent of GDP this year and to 1.2 percent next year.

The stable economic growth is coupled with a limited decrease in unemployment, down from 6.9 percent of the working force in 2015 (614,000 people) to 6.5 percent (580,000) this year and 6.3 percent (570,000) in 2017.

The CPB stated that the main uncertainty around the projections concern the international situation. "The continuing volatility on financial markets in response to that uncertainty has a negative impact on the investment climate, due to the uncertain level of return," the CPB stated.

"A Brexit would have a future negative impact on both the European and the Dutch economy, as would a discontinuation of the Schengen Agreement in response to the ongoing influx of asylum seekers," the CPB added.

"As a small economy, the development of the world economy remains important," Dijsselbloem said. The world economy is expected to grow by 2.9 percent this year and by 3.2 percent in 2017. For the euro zone this will be 1.6 and 1.7 percent respectively.

The projections of Monday are preliminary. The final version of the CPB's economic plan 2016 will be published on March 21 this year. Endit