2017 financial annual report: budget surplus for the second year running
The economy is showing strong growth and public finances are in good shape. The 2017 Budget Memorandum assumed a budget deficit of 0.5% of gross domestic product (GDP), but instead there was a surplus of 1.1%. This means that 2017 was the second successive year with a budget surplus. Last year the economy grew by 3.2% – the highest rate since 2008.
In 2017 the government debt fell to €416.1 billion. This was €24.4 billion lower than the government expected when it drew up the 2017 budget. The debt is now 56.7% of GDP, a drop of 5.4 percentage points. This means that it has fallen below the EU norm of 60% of GDP for the first time since the outbreak of the economic crisis.
These figures can be found in the 2017 national financial annual report, in which the government accounts for central government revenue and expenditure. Today, Minister of Finance Wopke Hoekstra officially presented the annual report and all the other accountability documents to the House of Representatives and the Senate. The House of Representatives will debate them on 23 May 2018.
‘The 2017 national financial annual report contains lots to be pleased about but, as you know, past results are no guarantee for future results,’ said the minister. ‘The financial impact of Brexit is still difficult to predict, and international developments – such as the threat of a trade war and military tensions – are causing disquiet. So it’s vital to maintain the right balance between spending money and creating buffers for more difficult economic times.’
In 2017 the number of people in work rose by nearly 200,000 – the highest increase since 2008. Unemployment fell to under 5%, and stood at the lowest level for over eight years at the end of 2017. Wages rose moderately in 2017 – by 1.5% compared with 2016. Wages in the private sector rose faster than in the public sector and at about the same rate as prices.
House prices continued to rise in 2017. At the end of last year, a house in the Netherlands cost, on average, 8.2% more than a year earlier. This means that prices rose at the fastest rate in 15 years. In the four big cities in particular, the housing market was very tight.
Last year the government took significant steps towards phasing out the interventions made by the state in the financial sector during the crisis. In 2017 the Minister of Finance sold state-held shares in ABN AMRO and the rest of the state’s shares in insurance company a.s.r.
In 2017 economic growth also picked up in the European Union (EU) and the rest of the world. The EU and the eurozone experienced higher growth than in previous years and public finances improved. Government debt fell slightly, though in some countries it is still markedly higher than the EU norm of 60% of GDP.