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National budget: 'Economic recovery still fragile'

News item | 21-09-2004

The government is calling the recovery of the Dutch economy 'moderate' and 'fragile'. Despite this uncertainty, the budget deficit in 2004 and 2005 will remain below the limit agreed in the European Stability Pact.

The national budget is presented every year at the State Opening of Parliament. It contains the government's main plans and their financial consequences. It also provides a picture of the current economic situation.

Recovery
The latest forecasts of the Netherlands Bureau for Economic Policy Analysis point to a moderate recovery of economic growth: a growth rate of 1.25% of GDP in 2004 and 1.5% in 2005. After a fall in 2003, investment and consumption will begin to grow again.

But the government considers the economic recovery to be still too fragile to absorb a rise in the working population. In 2005, the number of unemployed will grow to 550,000.

Budget deficit
In 2003, the Dutch budget deficit came to more than 3% of GDP, which is over the limit agreed in the European Stability Pact. Following new measures proposed by the government, the budget deficit is expected to come to 3% of GDP in 2004 and 2.6% in 2005.

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