DNB expects 2.7pc economic growth in 2006

17 June 2004

AMSTERDAM — As the Dutch economy recovers from last year’s recession, the reserve bank DNB has forecast above-average economic growth of 2.7 percent in 2006, due largely to increasing exports.

The DNB said in its latest quarterly report on Wednesday that the Dutch economy is slowly — but surely — on the mend. The reserve bank forecast modest growth of 0.8 percent for this year, 0.1 percent higher than its previous forecast.

Meanwhile, Gross Domestic Product (GDP) growth is expected to hit 2 percent in 2005, higher than the reduced forecast of 1.25 percent the Central Planning Bureau (CPB) estimated earlier this month.

According to the DNB, the economic recovery will initially be sparked by export growth and within two years, the export-led recovery will spread to domestic sectors, Dutch public news service NOS reported.

The Dutch economy grew by 0.4 percent in the first quarter of this year, having recovered from a nine-month recession in 2003. But the DNB asserts that it is too early to talk of a real economic recovery.

But the DNB points to the gradual improvement in business confidence as evidence of a better economic climate. It also said consumption increased in the previous quarter and despite more recent falls, the DNB first-quarter report also spoke of a gradual rise in consumer confidence.

Two other positive points for the DNB were the small increase in inflation and the reduced rate at which unemployment was rising.

The Central Bureau of Statistics (CBS) reported on Thursday that the Dutch jobless rate was 6.6 percent in the period March-April-May, compared with 5.2 percent in the same period last year.

Seasonally adjusted figures indicate that there were 495,000 people without work in the three-month period March-May 2004.

Subject: Dutch news