Dutch budget office questions whether labour market can absorb gov't spending plans

In an analysis of measures included in the governing pact for the new Cabinet sworn in on Monday, the Netherlands Bureau for Economic Policy Analysis (CPB) said promises for generous spending on sustainable energy, housing, childcare and education may be impossible to put into effect. It cautioned that it is working on draft ideas that may not be put into effect.


Reuters | Amsterdam | Updated: 11-01-2022 14:47 IST | Created: 11-01-2022 14:33 IST
Dutch budget office questions whether labour market can absorb gov't spending plans
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The Dutch government's policy analysis agency on Tuesday questioned whether spending plans by Prime Minister Mark Rutte's new Cabinet are feasible in light of tight labour markets. In an analysis of measures included in the governing pact for the new Cabinet sworn in on Monday, the Netherlands Bureau for Economic Policy Analysis (CPB) said promises for generous spending on sustainable energy, housing, childcare and education may be impossible to put into effect.

It cautioned that it is working on draft ideas that may not be put into effect. "The CPB considers it unlikely, in part due to the tight labour market, that all planned funding for infrastructure and defence can be spent during this Cabinet period" which runs through 2025, it said in a paper. Dutch unemployment is currently at 3.1%, with more jobs available than jobless people seeking work.

The CPB did not change its September economic forecast for 2022 of 3.5% GDP growth on the basis of the governing pact. But it said if the government pact were implemented as planned it would lead to 0.5% higher annual GDP growth through 2025 and 0.8% lower unemployment in 2025, at the cost of a higher national debt later.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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