Drop in purchasing power larger than predicted
19 October 2004 , AMSTERDAM — Purchasing power in the Netherlands could drop twice the amount expected, as energy prices as well as health insurance and pension premiums are rising more quickly than the government forecast, it was reported Tuesday.
19 October 2004
AMSTERDAM — Purchasing power in the Netherlands could drop twice the amount expected, as energy prices as well as health insurance and pension premiums are rising more quickly than the government forecast, it was reported Tuesday.
The price of oil is currently USD 15 above the price used by the CPB — the government's macroeconomic advice institute — in its calculations. Dutch energy companies Noun and Essent are raising gas and electricity charges by at least EUR 150 next year due to the higher oil costs.
The CPB expected pension premiums to remain stable, but these are rising at an unanticipated accelerated pace. It was announced last week that pension funds in the metal sector, for example, will rise by 13 percent in 2005.
The health insurers' branch organisation revealed last Friday that costs for private health insurance will rise between eight and 13 percent. The CPB had expected a rise of just 5 percent, newspaper De Volkskrant reported.
The boss of the incomes and prices division of the CPB, Marcel Lever, said the new figures could result in financial difficulties as higher than forecast costs will reduce purchasing power.
The decline in purchasing power could very easily rise above the government's forecast of 1 percent and could at maximum hit 2 percent.
But the Christian Democrat CDA, Liberal VVD and Democrat D66 coalition cabinet — which has unveiled EUR 2.5 billion in cuts to the 2005 Budget — is fiercely opposed to wage rises.
Consumer watchdog Consumentenbond said almost everything will become more expensive next year. It said cable prices, local taxes, train tickets, rent and childcare will rise next year, despite scarcely noticeable improvements in quality.
[Copyright Expatica News 2004]
Subject: Dutch news