Cabinet again lowers economic forecast

30th May 2009, Comments 0 comments

Finance Minister Wouter Bos has again lowered his economic forecast. Presenting the spring budget report, Bos said he expected the economy to shrink by more than five percent, possibly even six.

THE HAGUE - Finance Minister Wouter Bos has again lowered his economic forecast. Presenting the spring budget report, Bos said he expected the economy to shrink by more than five percent, possibly even six. Rabobank also predicts a six percent drop.

Figures released two weeks ago by Statistics Netherlands showed that in the first quarter of 2009 the economy contracted by 4.5 percent compared with the same period in 2008. Compared with the preceding quarter, the economy fell by 2.8 percent. Both figures represented the biggest drops recorded since 1945.

At the same time, the budget deficit has risen to 3.8 percent. When the cabinet presented its economic crisis plan in late March it was expecting the deficit to hover around three percent.

The finance minister has vowed to keep the stimulus package in place as long the economy remains in the doldrums. Bos expects the government will not be able to introduce structural budget cuts before 2011.

Once the economy recovers sufficiently, the finance minister will seek to cut EUR 1.8 billion in government, municipal and provincial expenditures.

Radio Netherlands / Expatica

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