- Category: News
- Created on Tuesday, 29 November 2011 13:06
- Written by Amsterdam Herald
The figures, included in finance minister Jan Kees de Jager’s (pictured) autumn budget statement, come hard on the heels of the shock revelation two weeks ago that the economy shrank by 0.3 per cent in the third quarter of the year.
The worsening deficit was attributed to lower income from taxes as well as social security bills amounting to €400 million and health care costs of €1.2 billion.
The deficit has grown by 0.3 percentage points in the last three months and is well above the 3.7 per cent figure forecast by the central planning bureau (Centraal Planbureau) in the summer.
The shortfall in tax revenue amounts to €1.5 billion. The national debt has also increased to 65% of gross domestic product, De Jager revealed.
The depressed property market has meant local authorities have raised less than was hoped from sales of land and surplus premises.
Last week De Jager told a radio station that he did not expect the government to make more budget cuts before 2013. “In 2012 we are still relatively safe, but after that it will get more difficult if the economic situation continues to be concerning,” he told BNR Nieuwsradio.
However, the minority centre-right coalition is coming under increasing pressure from the Freedom Party (PVV) of Geert Wilders to make much deeper cuts, including scrapping the international development budget worth €4 billion.
Relations between the government and Wilders, whose party agreed to prop up the cabinet by means of a ‘tolerance agreement’ (gedoogakkord), have become increasingly strained in recent weeks. An opinion poll last week revealed that 49% of voters expect the government to fall at some time during 2012.
The next test will come on December 13, when the CPB publishes its next set of economic statistics. If they show the decline continuing, De Jager may be forced to revise his “relatively safe” judgment.