The Dutch economy continues to do well but is now past its peak, the government’s macro-economic think-tank CPB said in its December economic forecast.

Next year, the CPB forecasts ‘robust’ economic growth of 2.2%, but given the growth percentages of 2.9% in 2017 and 2.6% in 2018, growth is now leveling off, the CPB said.

Several other forecasts in the past few days have reflected that trend.

The uncertainties which may have a negative economic impact remain substantial, the CPB said. ‘Outside the Netherlands, this is related to developments around the trade conflict between the United States and China, Brexit, the Italian budget, and the demonstrations in France,’ the organisation said.

‘The figures continue to be good,’ said CPB director Laura van Geest ‘Labour participation and unemployment have returned to their pre-recession levels, but the outlook is becoming less rosy.’

The CPB sees unemployment falling to its lowest level since 2013 next year, when it will drop to 3.6%. Purchasing power will also rise – up from 0.3% this year to 1.6% in 2019.

Wages

Labour shortages and higher inflation will cause rising increases in contract wages. Higher rents and increases in indirect taxes, in addition to wage cost increases, will contribute to the rising inflation.

Next year will also be the third consecutive year in which the government budget surplus will be at least 1% of GDP, the CBS said. However, in 2019, the budget balance, corrected for the economic circumstances, is projected to decline to a shortage of 0.2% of GDP.

Other forecasts

Earlier this week, the Dutch central bank forecast that economic growth would slow to 1.7% next year and in 2020, down from earlier forecasts of 2.2% and 1.9%.

‘Despite slightly lower growth figures, the Dutch economy will be running at full steam in the years ahead, with actual output exceeding its potential,’ the central bank said Monday.

Last Friday, Rabobank economists said that while growth will continue, it will be hit by both the shortage of workers and falling growth rates abroad. They forecast the Dutch economy will grow by 1.9% next year and 1.7% in 2020.

And earlier that week, ABN Amro said it is also revising down its economic growth forecast next year, from 2.5% to 2%. It, too, puts economic growth this year at 2.6%.