cover image: Central - The government deficit will peak at nearly 6% of GDP this year and

20.500.12592/j1g8k3

Central - The government deficit will peak at nearly 6% of GDP this year and

30 Mar 2021

With the expiration of the support measures and due to the economic recovery, the deficit will decrease to 1.7% of GDP in 2022, below the European maximum budget deficit of 3%. [...] Many factors played a role in the differences between the countries: differences in the severity of the epidemic (Figure 1.2, left), in people’s fear of becoming infected, in the severity of the measures taken, in the size of financial support packages (Figure 1.2, right) and differences in sectoral structure. [...] The post-August decrease partly stems from the strong recovery in production in the third quarter, but the further decline at the end of the year is a notable one, given the sharp decrease in production since the start of the coronavirus outbreak. [...] Source: CBS and CPB (link) As a result of the coronavirus-induced recession, the CAO wage increase in the market sector will fall from 2.7% in 2020 to 1.5% in 2021 and 2022.7 The collective wage agreements (CAOs) reached after the coronavirus outbreak in 2020 already had lower wage increases due to the uncertain outlook and the changed labour market. [...] There are uncertainties about the impact of the large US budgetary stimulus on inflation and interest rates in the United States as well as on the eurozone.16 For the eurozone, there are uncertainties about the economic effects of the recovery programmes within the framework of the European 16 Blanchard, O.

Authors

CPB

Pages
35
Published in
Netherlands

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