Zalm concerned about weak Dutch economy

Zalm concerned about weak economy
25 June 2003
AMSTERDAM — Finance Minister Gerrit Zalm has expressed concern about the state of the Dutch economy amid reports that growth has halted and unemployment will rise drastically during the next few months.

Speaking in a parliamentary debate about the upcoming budget, Zalm said that "the country is being hit by unpalatable reports about the economy".

"Unemployment is rising dramatically and we are faced with an increase of 14,000 per month," Zalm told MPs. "The CPB figures are no reason for joy."

His comments came as newspaper De Volkskrant published details on Wednesday of a leaked report drawn up by the government's macroeconomic think tank, Central Planning Bureau (CPB).

The CPB has predicted that for the first time since the early 1990s, unemployment will top 500,000 next year. The CPB has forecast that 40,000 more than previously expected will join the dole queues next year, bringing the total number of jobless workers to 530,000.

This would be a major blow for the coalition government's financial plans, as the budget deficit will increase to almost EUR 10 billion.

The three government parties, the Christian Democrat CDA, Zalm's Liberal VVD and the Democrat D66 party have agreed on a package of EUR 13 billion in spending cuts to keep the budget deficit below 2.5 percent of Gross Domestic Product (GDP).

But if the latest CPB figures are correct, the deficit could be forced up to 2.6 percent, De Volkskrant said, unless the government finds an additional EUR 500 million in savings.

The CPB said the continuing malaise in the global economy was the main reason for the stalled growth in the Netherlands. The nation has also performed worse than most other European countries due to rising wage costs and weak competitiveness.

In addition, the CPB said the Dutch economy is more dependent on the stock markets than most other countries and has consequently suffered more from the slump in the markets.

[© Novum Nieuws 2003]