Malaise continues as DNB cuts forecast

8th June 2005, Comments 0 comments

8 June 2005, AMSTERDAM — The Dutch reserve bank DNB has drastically reduced its economic forecast and expects growth of just 0.4 percent this year, down from an initial 1.7 percent.

8 June 2005

AMSTERDAM — The Dutch reserve bank DNB has drastically reduced its economic forecast and expects growth of just 0.4 percent this year, down from an initial 1.7 percent.

DNB President Nout Wellink also told newspaper 'De Volkskrant' disappointing growth meant more economic reforms were necessary.

Wellink said the poor economic performance in the past two quarters led to the revised forecast. He predicted an uncertain economic future.

The DNB chief said two weeks ago economic growth will be lower this year than forecast, but refused to give a figure when presenting the bank's annual report.

At the end of the May, the OECD forecast the Dutch economy would grow by 0.5 percent, while the Dutch Central Planning Bureau (CPB) followed the DNB lead on Wednesday and revised its forecast to 0.5 percent, down from 1 percent. 

Wellink said the moderate Dutch economic performance forced the present and future Dutch governments to carry out further reforms.

He pointed to the ageing population and the Chinese economy as reasons for the Dutch and European economic malaise.

However, he also said without the euro the Netherlands would have been worse off. Wellink said the national currencies would have encountered problems from the 11 September attacks, rising oil prices, the war in Iraq and the rise of China.

"The guilder would have become much more expensive and Dutch exporters would have had a lot of problems with that," he said.

Wellink stressed the public and employers are the key to recovery and need to be flexible enough to adjust to reforms. He denied asking too much of the public.

"I only say what must occur to realise the wishes of citizens. If you want a pension, you need to pay premiums and if you want a job, you have to accept a system that generates work," he said.

"But I admit that it is easy talking at such an abstract level, until it affects yourself," he said.

[Copyright Expatica News + ANP 2005]

Subject: Dutch news

0 Comments To This Article