IMF: Dutch Budget Deficit to 4.9 percent in 2016
THE HAGUE, 12/10/13 - The deficit on the Dutch budget will reach nearly five percent in 2016, the International Monetary Fund (IMF) said. The Hague denies this however.
The Dutch budget deficit will be above the three percent level the EU is calling for. The deficit will run up to 4.9 percent of the GDP over the next three years, according to the IMF's Fiscal Monitor which provides insight into global government finance.
The IMF based its projection on data provided by government macro-economic think tank CPB, but adjusted the figures because the insititute uses other macro-economic hypotheses than the CPB. The CPB forecasts that the Dutch deficit will fall below the three percent limit after 2015, projecting a 2.8 percent deficit in that year.
The differences with the IMF figures stems from the fact that the IMF regards the government measures for this year and next as one-offs without taking into account the structural effect of these, a finance ministry spokesman said. As a result, the cabinet is sticking to the CPB estimates published last month.
The IMF said higher spending on pensions and health care are swelling the Dutch deficit. The IMF is forecasting a deficit of precisely three percent this year. rising to 4.9 percent in 2016. The Washington-based organization said the deficit will remain about four percent in the years to 2018.
The national debt will also soar in the coming years. Ther IMF puts this figure at 74.4 percent of GDP this year, increasing to 83.2 percent in 2018.