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December projections 2017: economic boom and expansive budget

Published: 20 December 2017

Economic growth is projected to continue in 2018. GDP will increase by more than 3%, as it did in 2017. These are the highest growth percentages since 2007. Therefore, by next year, we can speak of an economic boom. All forms of spending will contribute to growth. This is the conclusion by CPB Netherlands Bureau for Economic Policy Analysis in its December projections, published today.

Go straight to the data.

Table main data

Government spending is playing a particular role, here. The government is pursuing a pro-cyclical budgetary policy, which fuels economic growth. In 2017, the increase in government spending was no more than 0.4%, whereas in 2018, it is projected to be 3.5%. This is due to measures under the Coalition Agreement — such as increased spending on education and national defence —  as well as to increasing health care expenditures. Despite this increase in public spending, the government budget will still have a surplus of 0.5%.  

In 2018, employment will see a substantial increase of 2% and, because of the less-rapidly growing labour supply, unemployment will decrease further, down to 3.9% of the labour force — the lowest level since 2007. The tight labour market means companies will pay higher wages, in order to attract and hold on to personnel. The increase in real wages translates into an increase in purchasing power. The jobs increase also leads to a higher disposable income for households.    

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