The economic forecasts of the CPB show positive prospects: the economy is expected to grow by 1.6% this year, next year by around 1.4%. “It’s just good years,” says economist Edin Mujagíc. And even if our purchasing power is deteriorating a bit this year, next year we will compensate for it with a two percent increase. “When you consider what we’re all dealing with in the world, these are estimates for crossing a loop.”
Despite this good economic growth, the CPB also warns that more people will fall below the poverty line next year. ‘The economic pie is therefore increasing, but its distribution is even more skewed than in previous years. Seven per cent of children are predicted to live in poverty, which hurts a lot in a rich country like Holland.”
According to Mujagíc, the fact that there are more Dutch people who will face financial difficulties in 2024 has everything to do with that high inflation. “It always hits the middle class and the layers below hard. You see it now. Despite the expected reasonable economic growth, there are more people who will notice little or nothing.’
“Despite the reasonable expected economic growth, there are more people who will notice little or nothing”
Warnings
Surprisingly, Mujagíc says the CPB is counting on the interest rate levels we now see will remain unchanged through 2024. For example, Fed head Jerome Powell and ECB President Christine Lagarde have already announced this week that some rate hikes of interest are still needed to overcome the high combat inflation. “There is a lot to be said about the CPB hypothesis, because it is not possible to predict what interest rates will do,” says Mujagíc. “But it means you can make a big comment on those estimates.”
According to Mujagíc, the inflation figure on which the CPB bases its calculations is also open to debate. “For this year and next, the CPB assumes inflation of three per cent. This is a bit low in my opinion. De Nederlandsche Bank forecasts inflation of around five percent in both years. If this prediction comes true, the increase in purchasing power in 2024 could be stopped.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
