Relief as budget deficit falls to 2.3 percent

31st March 2005, Comments 0 comments

31 March 2005, AMSTERDAM — The Netherlands budget deficit for 2004 came to 2.3 percent of Gross Domestic Product (GDP), well under the 3 percent limit set by the eurozone Growth and Stability Pact.

31 March 2005

AMSTERDAM — The Netherlands budget deficit for 2004 came to 2.3 percent of Gross Domestic Product (GDP), well under the 3 percent limit set by the eurozone Growth and Stability Pact.

Dutch Finance Minister Gerrit Zalm has in the past criticised France and Germany for running deficits higher than the 3 percent limit. But it was a matter of embarrassment when the Dutch deficit for 2003 hit 3.2 percent.

The government in The Hague introduced tough cutbacks when it came into office in 2003 to reduce the deficit.

The subsequent reduction to 2.3 percent in 2004 is mainly due to lower government expenditure and higher income tax, Statistics Netherlands, better known as the CBS, said on Thursday.

The government as a whole — central government, local government and social funds — had a total deficit of EUR 10.7 billion in 2004. The major portion, EUR 8.4 billion, related to the central government.

Local government booked a deficit of EUR 2.8 billion, a relatively high proportion, the CBS said. This was due to higher investment and stagnation in ground sales.

Social funds accounted for a deficit of EUR 0.5 billion, fractionally higher than in 2003.

The total deficit for all government bodies in 2003 came to EUR 13.4 billion.

Meanwhile, the Dutch economy grew by 1.4 percent in 2004, a slight improvement on the shrinkage in 2004. GDP growth in 2004 remained well below the average 2.5 percent growth over the past 25 years, the CBS said in its second assessment of the year.

The latest figure is 0.1 percent higher than the initial estimate in February.

The CBS said the limited economic recovery in 2004 was mainly due to a sharp rise in exports, coupled with a recovery in investment in comparison to the past few years.

[Copyright Expatica News 2005]

Subject: Dutch news

0 Comments To This Article