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Dutch Growth To Slow Amid Global Headwinds

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The Dutch economic growth is set to slow this year and next as global headwinds such as trade tensions and geopolitical factors weigh on exports.

The Bureau of Economic Policy Analysis, or CPB, which is the government forecasting agency, projected 1.7 percent economic growth for this year versus 1.5 percent forecast in March.

Thus, growth is seen sharply slowing from 2.7 percent in 2018.

Meanwhile, the CPB retained the outlook for 2020 at 1.5 percent.

According to the half-yearly forecast of the Dutch central bank, released on June 11, the economy will grow 1.6 percent this year and 1.5 percent in 2020.

The CPB observed that US trade policy, the chances of a no-deal Brexit, and the unstable situation in Italy are the major downward risks to the economy.

"Despite a rather standard economic growth rate, employment growth will remain remarkably large," CPB Director Laura van Geest said.

"Wage increases will be limited, due to the tight labor market—something that, incidentally, is not a uniquely Dutch phenomenon."

The unemployment rate is forecast to fall to 3.5 percent in 2019, before rising to 3.7 percent in 2020.

Further, the government budget is forecast to remain positive, at 1.3 percent of GDP in 2019 and 0.6 percent in 2020.

Inflation is expected to accelerate to 2.6 percent in 2019, due to taxes, and to slow down to 1.4 percent next year.

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