'Favourable turn' coming up for Dutch economy

21st March 2006, Comments 0 comments

21 March 2006, AMSTERDAM — The public's spending power, investment and exports are set to rise this year as an exceptionally long period of recession seems to be ending for the Dutch economy, a government agency has predicted.

21 March 2006

AMSTERDAM — The public's spending power, investment and exports are set to rise this year as an exceptionally long period of recession seems to be ending for the Dutch economy, a government agency has predicted.

The macroeconomic think tank CPB said the economy will take "favourable turns on several fronts in 2006".

"A novelty in this century: the Dutch economy will probably grow faster than the economy of the euro area," the CPB said in a preview of its Central Economic Pan 2006 on Tuesday. The full report (in Dutch only) will be made  available on 5 April.

Growth in consumption, investments and exports is also expected to  pick up. The competitive position of Dutch trade and industry is improving, for the first time in six years. "Exports will gain momentum as a result of growth recovery in Europe. Furthermore, the Dutch competitive position may improve somewhat, after five years of decline," according to the report.

The CPB said economic growth is estimated at 2.75 percent this year and can accelerate to 3 percent next year. "The labour market also shows positive changes. Employment has been rising since the end of 2005 and unemployment is falling. These developments seem to continue this year and the next, and may even become more intense."

The public's purchasing power will grow by 1 percent in both 2006 and 2007, although there will be large differences between households. The government budget will almost be in balance next year, the CPB said.

"As of this year, domestic expenditure will also make an important contribution to the development of the Dutch economy. Consumption will increase by 1.25% in both 2006 and 2007, thanks to the recovery of purchasing power and the upsurge in the labour market," the CPB's researchers predicted.

[Copyright Expatica News 2006]

Subject: Dutch news

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