(Updates with details)
AMSTERDAM Dec 8 The Dutch economy will grow
around 2 percent this year and next year, International Monetary
Fund experts said on Thursday.
IMF Netherlands Mission Chief Thomas Dorsey said at a news
conference after a visit that external risks to the
trade-dependent Dutch economy were balanced by strong domestic
demand that may not be fully accounted for by most models.
The most recent projections by the CPB, the forecasting
office of the Dutch government, include GDP growth of 1.7
percent 2016 and 2017.
Amid a largely favourable review, Dorsey said that high
household debt -- largely resulting from generous rules on
deducting mortgage interest -- present one risk to the Dutch
The effect is doubled because of the three big Dutch banks,
ING, ABN Amro and Rabobank, all
have large exposure to mortgage debt. In the event the Basel
committee settles on higher risk weightings for mortgages,
equity at the banks could be hit.
However, the review also noted that unemployment is falling,
credit is growing, personal savings levels are high, and
companies and banks have also been strengthening their cash
Dorsey said the Dutch government has room to either increase
spending on infrastructure or to cut taxes, while remaining
comfortably within European budgetary rules.
He said the government's deficit is set to fall to 0.7
percent of GDP in 2017, and debt-to-GDP will be around 61
percent by the end of the year.
(Reporting by Toby Sterling, editing by Larry King)