September 19, 2017 / 5:49 PM / a year ago

Dutch government budget surplus seen in 2017-2018

AMSTERDAM (Reuters) - The Dutch government expects to post a budget surplus this year and next, as the economy of the Netherlands continues to grow at its fastest pace in a decade, a leading forecaster said on Tuesday.

The positive outlook accompanied the caretaker government’s 2018 budget, which included spending increases for teachers’ wages, cyber security and policies to lift the income of pensioners and low wage earners.

Economic growth will reach 3.3 percent in 2017 and 2.5 percent in 2018, the Netherlands Bureau for Economic Policy Analysis said, maintaining forecasts published in August.

A budget surplus of 0.6 percent will be achieved in 2017, rising to 0.8 percent next year, the CPB said.

Unemployment will dip to 4.9 percent in 2017 and 4.3 percent in 2018, the lowest levels in a decade, with some sectors reporting employment shortages.

It was welcome news for caretaker Prime Minister Mark Rutte, who has been tied up in negotiations to form a new coalition since winning elections on March 15.

A one-time 425 million euros (377.43 million pounds) would go toward restoring purchasing power after years of austerity. Around 270 million euros would be used to lift elementary school teachers’ wages and tens of million is earmarked for cyber security.

Reporting by Anthony Deutsch; Editing by Robin Pomeroy

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