Bloomberg News

Dutch 2013 Budget Deficit to Widen as Ministry Notes Setbacks

May 24, 2013

The Dutch budget deficit will widen to 3.3 percent of gross domestic product this year from an earlier forecast of 2.6 percent as rising unemployment and lower consumer spending reduces government income.

“The 2013 budget is characterized by setbacks,” the Ministry of Finance in The Hague said in a letter to parliament today. The forecast is in line with the most recent estimate by the Central Planning Bureau, or CPB.

The Netherlands, which has been in breach of European Union deficit rules since 2009, is trying to get its deficit below 3 percent of GDP again with a four-year, 16 billion-euro ($21 billion) austerity package agreed on by the coalition government in October. The Cabinet led by Prime Minister Mark Rutte will decide later this year on additional measures of 4.3 billion euros needed to meet the target next year.

Rutte said yesterday at a joint news conference with German Chancellor Angela Merkel that he won’t ask for more time to meet the 2014 deficit target. Finance Minister Jeroen Dijsselbloem said on May 15 that the “the economy has reached bottom” and that he still expects a recovery in the second half of 2013. The European Commission is set to issue recommendations for the Netherlands on May 29.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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