The OECD expects the Dutch economy to grow by just 0.8% next year, up from +4.3% this year. According to Rabobank senior economist Frank van Es, the OECD’s assessment looks worse than it actually is. “It has been known for some time that some cooling was coming and it seems that now the OECD is realizing it too.”
The assessment by the OECD is more negative than the forecast by the Central Planning Bureau, which foresees growth of 1.5 percent in the Dutch gross domestic product (GDP) for next year. The OECD expects growth to pick up again in 2024 at 1.1%.
As for wages, the Paris think tank expects an increase of about 5 percent in 2023 and 2024. Unemployment is expected to remain low due to the tight job market; for 2024, the OECD forecasts unemployment in the Netherlands at 4.3%.
“OECD too negative”
The OECD also expects inflation in the Netherlands to average 8.5% next year. By the end of 2024, it is expected to fall to 3.9%. For the fourth quarter of this year, the organization forecasts a peak of inflation in our country of 15.4 percent, driven by high energy and food prices.
“This is a bit of an exaggeration,” says Van Es. ‘It seems that the OECD expects core inflation to rise significantly, i.e. without energy prices. And we don’t expect it, at least not up to that point».
Even the OECD states that the price cap for energy is too generic. This should be aimed more at families with lower incomes. Furthermore, energy saving should be further encouraged. Van Es shares this criticism. ‘We think this plan is too general. It costs a lot of money and mostly ends up with people who don’t really need it. A more specific plan would have been better, because in this way the incentive to become more sustainable is also lost.’
According to the OECD, the government should give higher priority to accelerating the energy transition in order to secure energy supply and reduce dependence on fossil fuels.