Dutch Economy to Slip Into First Recession Since 1982, CPB Says

By Jurjen van de Pol

Dec. 8 (Bloomberg) -- The Dutch economy will enter its first recession since 1982 next year as the credit crisis curbs exports and the government budget shows a deficit, according to a forecast by the government planning agency CPB.

The economy in the Netherlands, the fifth-largest in the euro region, will contract 0.75 percent next year after growth of 2.25 percent this year, only to recover in 2010 when the economy expands 1 percent, the agency said in statement released in The Hague today. Inflation is forecast to slow to 1.5 percent next year and 1 percent in 2010 from 2.5 percent this year.

“The credit crisis is causing a decline in economic activity that hasn’t occurred since the beginning of the 1980s,” the agency said. “The economic decline will increase unemployment markedly.” Uncertainties about the timing of the recovery are considerable, the agency added.

Europe’s economy slipped into a recession in the third quarter and the International Monetary Fund predicts the worst global slump in almost three decades. The Dutch economy came to a standstill in the second and third quarters, the national statistics bureau said last month.

This year’s budget surplus of 1.3 percent of gross domestic product will turn into a deficit of 1.2 percent next year and a deficit of 2.4 percent in 2010 as tax revenue and natural gas proceeds decline while spending on unemployment benefits rises, the agency said.

To contact the reporter on this story: Jurjen van de Pol in Amsterdam jvandepol@bloomberg.net