Dutch households pessimistic over finances

15 November 2004

AMSTERDAM — Dutch households remain pessimistic about their financial future, with almost one in five expecting to suffer in the coming year, the same amount as last year, the Central Bureau of Statistics (CBS) said Monday.

The CBS also said in a press release that older people are more often pessimistic than younger Dutch residents.

Pessimism over a personal financial situation remains unchanged and high. In the first 10 months of this year, 19 percent of households expected to suffer financially in the coming 12 months, while 14 percent expected their finances to improve.

As it was last year, the number of pessimists outnumber the optimists, the CBS said.

Some 36 percent also think that their financial situation worsened in the past 12 months, compared with 11 percent who believe their finances improved.

The Dutch economy entered into nine-month recession last year and amid a sluggish recovery, the government has extended its cost-cutting regime.

Unions agreed earlier this month to wage moderation in exchange for various concessions on early retirement schemes, the WAO worker disability pension and WW unemployment benefits.

Prior to that accord, purchasing power was forecast to decline by about 1 percent in 2005, but the Central Planning Bureau (CPB) has warned that the decline could be double that amount.

Meanwhile, singles aged 45 or older are more pessimistic than other age groups, with almost a quarter expecting a worsened situation in the coming 12 months. Older, childless couples are also pessimistic, but slightly less than 45-plus singles.

Younger households and households with children are considerably more optimistic about their financial situation, the CBS found.

While most households did not encounter great financial problems, almost a quarter said they did not have enough money to replace worn furniture in 2003. One out of six could not regularly buy new clothes.

But households with debt payment problems are becoming less common. Almost 6 out of every 100 households admitted in the past 12 months they had fallen behind in paying fixed costs. Despite this, 13 percent said they have difficulty making ends meet.

Single parent families encounter relatively great difficulty making ends meet, with 60 percent having insufficient money to replace old furniture. Almost 50 percent could not regularly buy new clothes.

The CBS said these families have on average a lower income and they often have fewer assets in comparison with other households.

Subject: Dutch news