September 19, 2023

Projections September 2023 (MEV 2024)

Purchasing power measures prevent rise in poverty, government deficit remains unchanged

Press release
The plans in the Budget Memorandum for 2024 presented by the demissionary cabinet on Budget Day lead to an improvement in the purchasing power of people on lower incomes. This prevents an increase in the number of people below the poverty line and reduces the number of children in poverty. Since the measures are funded by increases in the financial burden, the government deficit remains unchanged compared to the August projection. This is according to the Macro Economic Outlook for 2024 published by CPB Netherlands Bureau for Economic Policy Analysis on 19 September.
The briefcase from Budget Day, containing the budget, and the carriage in which the king and queen will be transported

The increase in the child budget, the rent allowance, labour tax credit and social welfare benefits prevent a rise in poverty in 2024. A total of 830,000 people are projected to be below the poverty line in 2024 (4.8% of the population). In the draft Macro Economic Outlook (cMEV), published in August, CPB projected a total of 990,000 (5.7% of the population). Poverty among children falls as a result of the new measures from 6.2% in 2023 to 5.1% in 2024. In the cMEV this percentage was projected to be 7.0%. Child poverty decreases because the increase in the child budget only benefits households with children. 

Purchasing power

The purchasing power package improves the purchasing power of the lowest two income groups (households with gross income of up to 47,000 euros) compared to the cMEV. At the same time the financial burden is increased in order to meet the budgetary cost of the measures. This increase in the financial burden mainly affects people on higher incomes, causing their purchasing power to rise less than was previously projected. The increase in median purchasing power therefore remains almost unchanged overall in 2024 compared to the cMEV (1.8%) and the differences between the income groups are smaller.

Public finances and GDP growth

The government deficit remains unchanged compared to the previous projection, because the additional expenditure is funded by increases in the financial burden. The government deficit is 2.4% of gross domestic product in 2024, the same as in the cMEV. Economic growth is expected to be 1.5% in 2024, 0.1% higher than projected in the cMEV. 

  2023 2024 Difference in 2024 compared to cMEV
Gross domestic product (GDP, economic growth, % per year) 0.7 1.5 0.1
Unemployed rate (% of the labour force) 3.6 4.0 0.0
Purchasing power, static, median all households (% per year) (a) -1.1 1.8 -0.1
People in poverty (level in %) (a) 4.8 4.8 -0.9
General government deficit (% GDP) 1.6 2.4 0.0

(a) purchasing power and poverty calculated using the alternative CPI, which from 2021 takes account of the delayed impact of energy prices due to current energy contracts.

Contacts

The most recent version of the Excel-appendices with long series can be found in the cMEV 2024-projections, published in August.

This publication is in Dutch, there is no English translation!
September 19, 2023
Het CPB certificeert budgettaire ramingen van de fiscale beleidsmaatregelen uit het wetsvoorstel Belastingplan 2024, overige wetsvoorstellen in het pakket Belastingplan 2024 en de raming voor 2026 voor de bestaande Overbruggingswet box 3. Het CPB acht de ramingen van de budgettaire effecten van de maatregelen redelijk en neutraal.

In totaal zijn zeventien fiscale maatregelen aan een uitvoerige toetsing onderworpen. Daarvan zijn er vijftien beoordeeld vanwege een geraamd budgettair effect van tenminste 50 mln euro, grote gedragseffecten of een sterk onzekere grondslag en twee op basis van een steekproef. 

This publication is in Dutch, there is no English translation!
September 19, 2023
Het CPB raamt het gemiddelde aantal bijstandsuitkeringen op 336 duizend in 2023. Dit is een daling van 5 duizend uitkeringen ten opzichte van het gerealiseerde volume in 2022. De daling komt voornamelijk doordat de werkloze beroepsbevolking in 2022 afgenomen is. Dit werkt vertraagd door op het bijstandsvolume. Naar verwachting stijgt het aantal bijstandsuitkeringen in 2024, naar een niveau van 346 duizend uitkeringen. In deze notitie geven we een toelichting op deze raming van het bijstandsvolume in 2023 en 2024 in de Macro Economische Verkenning (MEV) 2024.

Voor de bekostiging van uitkeringen op grond van de Participatiewet ontvangen gemeenten een budget van het ministerie van Sociale Zaken Werkgelegenheid. De hoogte van het budget wordt bepaald op basis van een raming voor het aantal uitkeringsgerechtigden en de gemiddelde hoogte van een bijstandsuitkering. Het CPB publiceert ramingen van het aantal bijstandsuitkeringen in het lopende en komende jaar in het Centraal Economisch Plan (CEP) in maart en in de MEV in september. 

September 19, 2023
The plans in the Budget Memorandum for 2024 presented by the demissionary cabinet on Budget Day lead to an improvement in the purchasing power of people on lower incomes. This prevents an increase in the number of people below the poverty line and reduces the number of children in poverty. Since the measures are funded by increases in the financial burden, the government deficit remains unchanged compared to the August projections.

The most recent version of the Excel-appendices with long series can be found in the cMEV 2024-projections, published in August.

Table 'Main economic indicators', 2021-2024, September 2023

International items
  2021 2022 2023 2024
Relevant world trade volume goods and services (%) 8.5 8.4 0.2 2.9
Export price competitors (goods and services, non-commodities, %) 5.9 8.8 3.4 2.5
Crude oil price (dollar per barrel) 70.7 100.8 79.3 76.3
Exchange rate (dollar per euro) 1.18 1.05 1.09 1.11
Long-term interest rate the Netherlands (level in %) -0.3 1.4 2.8 2.8
GDP and demand (volume)
  2021 2022 2023 2024
Gross domestic product (GDP, economic growth, %) 6.2 4.3 0.7 1.5
Household consumption (%) 4.3 6.6 0.6 2.4
Government consumption (%) 5.0 1.6 2.4 3.1
Capital formation including changes in stock (%) 4.7 1.0 2.8 0.3
Exports of goods and services (%) 8.0 4.5 0.8 1.5
Imports of goods and services (%) 6.2 3.8 1.9 2.1

Prices, wages, purchasing power and poverty
  2021 2022 2023 2024
Price gross domestic product (%) 2.9 5.5 6.6 3.3
Export price goods and services (%) 8.8 17.4 1.0 3.4
Import price goods and services (%) 10.0 20.7 -0.3 3.5
Inflation, national consumer price index (CPI, %) 2.7 10.0 3.9 3.8
Alternative CPI (purchasing power and poverty figures) (%) (a) 2.1 6.8 7.8 3.6
Inflation, harmonised index of consumer prices (HICP, %) 2.8 11.6 4.1 3.9
Compensation per hour private sector (%) (b) 0.0 3.7 6.8 5.8
Wages as determined in collective labour agreements, private sector (%) 2.2 3.1 5.8 5.6
Purchasing power, static, median all households (%) (c) 0.9 -2.7 -1.1 1.8
People in poverty (level in %) (c,d) 6.1 4.7 4.8 4.8
Labour market
  2021 2022 2023 2024
Labour force (%) 0.9 2.4 1.9 0.9
Active labour force (%) 1.5 3.2 1.8 0.5
Unemployment (in thousands of persons) 408 350 360 405
Unemployed rate (% of the labour force) 4.2 3.5 3.6 4.0
Employment (hours, %) 3.3 3.9 1.2 0.6
Other items
  2021 2022 2023 2024
Labour share in enterprise income (level in %) 72.9 71.5 70.6 71.5
Labour productivity private sector (per hour, %) 4.0 1.0 -0.9 0.8
Private savings (% of disposable household income) 11.2 7.6 7.9 8.4
Current-account balance (level in % GDP) 12.1 9.2 9.1 8.5
Public sector
  2021 2022 2023 2024
General government financial balance (% GDP) -2.3 -0.1 -1.5 -2.4
Gross debt general government (% GDP) 51.7 50.1 47.7 46.9
Taxes and social security contributions (% GDP) 39.2 38.6 38.8 38.7
Gross government expenditure (% GDP) 46.5 43.7 44.1 44.9

(a) The alternative CPI takes into account prices of both new and existing energy contracts. See par. 1.4 of the 'Central Economic Plan-CEP-2023-Verdieping' (link) for more information on the alternative cpi series and see CBS (link).

(b) The NOW wage cost subsidy, and the continuity contribution to health care, have a downward effect of 1.6%-points in 2021 and 2022.

(c) The alternative cpi has been taken into account for the median purchasing power figures and the persons in poverty.

(d) The ratio of the number of persons in households below the poverty line and the total number of persons. The modest-but-adequate budget of the Netherlands Institute for Social Research has been used as the poverty line.