The Dutch economy is expected grow above the Eurozone average over the next two years, according to the latest quarterly forecast presented by Dutch statistics agency CPB.
Dutch GDP has grown by 3.1% in 2017 and is expected to pick up to 3.2% in 2018 before slowing down to 2.7% in 2019.
The CPB also predicts that inflation will increase from 1.6 % this year to 2.3% by 2019 due to a combination of rising labour costs and an increase of VAT levels in the lower tax brackets.
Despite those price rises, the CPB expects a increase in purchasing power from 0.6% in 2018 to 1.6% in 2019, partly due to a predicted drop in unemployment levels from 3.9% this year to 3.5% next year.
“The solid economic growth in the Netherlands is the result of a favourable global economic backdrop, low interest rates and expansionary polices in the Netherlands combined with a buoyant property market. The last two factors in particular constitute a significant difference compared to other countries” the CPB said.
“Our predictions are based on a mild Brexit scenario assuming that a trade deal will be reached. In the event of a chaotic Brexit or disappointing negotiations, the negative effects on the economy could be significantly worse” it added.
Despite an overall improvement in macroeconomic figures, the CPB predicts that the government’s budget surplus will decline from 1.1% in 2017 to 0.9% in 2019, due to a combination of higher investments in education and military spending as well as rising healthcare costs.