Economy flourishes, but international uncertainties are increasing

The Dutch economy continues to flourish, with growth figures of 2.8% this year and 2.6% in 2019. Unemployment will drop to 3.5%, and most households will experience an increase in purchasing power. The expansive budget and relatively flexible monetary policy both play a role, here. There are nevertheless increasing uncertainties that may have a negative economic impact. This includes emerging trade wars, uncertain Italian budget policy, and a possible hard Brexit. Because of the strong economy, public finances are in the green. However, the cyclically adjusted budget balance will decrease in 2019 to a deficit of 0.4% of GDP. This is the conclusion of CPB Netherlands Bureau for Economic Policy Analysis in its Macro Economic Outlook (MEV) published today. The latest economic projections, which include the most recent Cabinet decisions, hardly deviate from CPBâs preliminary August projections (cMEV).