Dutch Budget Deficit to Widen in 2014, Planning Agency Says

The Dutch budget deficit will widen in 2014 as the outlook for the economy remains weak, CPB, the government’s planning agency, said.

The deficit will hit 3.7 percent of gross domestic product in 2014, The Hague-based CPB said in a statement yesterday. In February, it forecast a deficit of 3.4 percent. It sees a deficit of 3.5 percent in 2013.

“The international and Dutch economies look gloomy,” CPB said. “Growth of world trade is historically slow, as is GDP in the eurozone. The only positive factor is that the economy seems to be shrinking at a slower rate.”

Prime Minister Mark Rutte’s coalition government is trying to narrow its budget gap with a four-year, 16 billion-euro ($21.4 billion) austerity package on which agreement was reached in October. The Cabinet will decide in August on additional measures needed to meet the 3 percent limit in 2014.

The planning agency also revised downward its economic outlook. It forecasts GDP will decline 1 percent in 2013 while it sees a growth of 1 percent in 2014. Unemployment is forecast to increase to 7 percent in 2014.

European Union Commissioner Olli Rehn and Dutch Finance Minister Jeroen Dijsselbloem said in The Hague on June 11 that around 6 billion euros ($8 billion) of austerity is necessary in 2014 to get the budget deficit within the EU’s limit of 3 percent of gross domestic product.

To contact the reporter on this story: Corina Ruhe in Amsterdam at cruhe@bloomberg.net

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

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