Tuesday, April 13, 2021
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Home Breaking News CPB adjusts economic growth downwards, unemployment continues to rise | NOW

CPB adjusts economic growth downwards, unemployment continues to rise | NOW

The Dutch economy will grow by 2.2 percent in 2021, according to a forecast by the Central Planning Bureau (CPB). In 2022, the growth would even be 3.5 percent. At the same time, unemployment will peak at 4.7 percent next year.

The growth figures are slightly lower than the estimate published by the CPB in November. Then there was still 3 percent, but the second wave of the corona virus has thrown a spanner in the works, says the Planning Bureau.

However, the unemployment estimate for this year has been revised downwards, as it was remarkably low last year due to the support measures for companies. However, it will rise to 4.7 percent in 2022, when the same support measures come to an end.

“Despite the lockdown, which has hit specific sectors hard, the economy as a whole is doing relatively well. Recovery is in sight, but even if the virus is under control, the economic consequences of the crisis will continue to have an effect. We expect that some companies will still not be able to make it and that unemployment will rise temporarily “, says CPB director Pieter Hasekamp.

Wages and purchasing power are rising less sharply

Wages will also rise less sharply in the coming year. The collective labor agreement wage increase in the market sector will fall from 2.7 percent in 2020 to 1.5 percent per year in 2021 and 2022. As a result, purchasing power will only grow slightly by 0.7 percent in 2021. Next year there will even be a small decrease of 0.1 percent.

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Government spending will rise this year and next. The government deficit will reach 6 percent of gross domestic product (GDP) this year, but will decrease to 1.7 percent in 2022. In principle, the support measures will decrease and there will be more tax revenues. By 2025, the deficit should have fallen to 1 percent of GDP.

Until 2025, the economy will grow about 2 percent per year, predicts the CPB. The sustainability gap, which indicates how much burdens are being shifted to future generations, has worsened due to the corona crisis and is now 1.8 percent of GDP.

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