Dutch Economy to Slip Into First Recession Since 1982
The Dutch economy will enter its first recession since 1982 next year as the credit crisis curbs exports and the government budget shows a deficit, according to a forecast by government planning agency CPB.
The economy in the Netherlands, the fifth-largest in the euro region, will contract 0.75 percent next year after growth of 2.25 percent this year, only to recover in 2010 when the economy expands 1 percent, the agency said in statement released in The Hague today. Inflation is forecast to slow to 1.5 percent next year and 1 percent in 2010 from 2.5 percent this year.
“The credit crisis is causing a decline in economic activity that hasn’t occurred since the beginning of the 1980s,” the CPB said. “The economic decline will increase unemployment markedly.” Uncertainties about the timing of the recovery are considerable, the agency added.
Europe’s economy slipped into a recession in the third quarter and the International Monetary Fund predicts the worst global slump in almost three decades. The Dutch economy came to a standstill in the second and third quarters, the national statistics bureau said last month fast payday loans.
Exports from the Netherlands, the third-largest exporter in the euro region, will contract 2.25 percent next year as shipments of goods including consumer electronics and computers decline. Dutch exports will pick up again 2010, the agency said.
Deficit, Debt
This year’s budget surplus of 1.3 percent of gross domestic product will turn into a deficit of 1.2 percent next year and a deficit of 2.4 percent in 2010 as tax revenue and natural gas proceeds decline while spending on unemployment benefits rises, the CPB said.
Government debt will increase to 56.7 percent of GDP this year from a September forecast of 42.1 percent after the Dutch government stepped up borrowing to buy assets from Fortis in the Netherlands for 16.8 billion euros ($21.6 billion). The government bailout sought to boost confidence and bank lending after clients continued to withdraw money and banks remained reluctant to lend to Fortis.
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