The Dutch economy is expected to see hardly any growth this year, with higher unemployment, increased bankruptcies and less household spending, the Dutch central bank DNB said on Monday.
"The economy is growing only very slightly," largely due to much lower world trade and high inflation, said the DNB in its latest economic forecast.
The growth rates are anticipated to be 0.1 percent for this year, 0.3 percent for the upcoming year, and 1 percent by 2025, according to the forecast.
Inflation in the Netherlands, which is 4.1 percent this year, is expected to fall to 2.9 percent next year and further to 2.2 percent in 2025, the central bank said, attributing the falling inflation mainly to lower energy prices, a further cooling of the economy and the decline in world trade.
The government's budget deficit will remain limited to 0.9 percent of gross domestic product (GDP) this year. But the bank said the situation will deteriorate rapidly in the coming years, partly because more interest has to be paid on government debt. The deficit will then rise towards the European Union's limit of 3 percent.
"If economic conditions abroad deteriorate, including due to increasing uncertainty and geopolitical tensions, the Netherlands as a trading country will be hit hard," the bank said, adding that in a worse scenario, the Dutch economy could contract 0.4 percent in 2024.
