The Netherlands is creeping out of recession, with growth of 0.5% forecast for 2014, the government’s macro-economic planning agency CPB said on Tuesday.

However, unemployment is forecast to increase by 665,000 in 2014 to 7.5% of the population. Inflation is expected to be 1.5%, under the European norm of 2%.

The CPB says spending power will increase 1% next year due to lower taxes, healthcare premiums and civil service pension premiums.

Nevertheless, households will spend less money. Household spending has dropped this year by 2% and will see a further 0.75% decline in 2014.

‘2014 will be a year of economic recovery, stabilising unemployment, lower inflation and a slight improvement in the budget deficit,’ the CPB says.

Next year’s budget deficit will be 3.3% is the forecast, above the eurozone norm of 3%. Despite the extra cuts of €6bn in spending, the government will spend €20bn more than it earns.