On 16 August 2018 Sandra Phlippen, Assistant Professor at Erasmus School of Economics, made her appearance in the Dutch current affairs programme Nieuwsuur. Phlippen, who is also affiliated with ABN AMRO’s Group Economics as Head for the Netherlands, reacts on the publication of the preliminary version of the Macro Economic Outlook 2019 (cMEV) by the CPB Netherlands Bureau for Economic Policy Analysis. The cMEV is used by the Dutch Cabinet as a basis for its August decisions on next year’s purchasing power.
In 2019, the economy will continue to grow at a higher-than-average pace, as was also the case in 2017 and 2018. Unemployment, in 2019, will continue to decrease, to the historically low level of 3.5%. Higher labour costs and an increase in the lower VAT tariff will have their effect on a higher inflation rate. Particularly fiscal measures in the Coalition Agreement will nevertheless cause mean static purchasing power to increase by 1.3% in 2019 (0.4% in 2018). Despite additional government spending, the economic boom will still lead to a budgetary surplus; the government debt will decrease to 49%.
The downward risks for the economy have increased. Trade conflicts that could lead to a trade war have become starker. The risk of a hard Brexit is increasing by the day. Economic policy in Italy and a slowdown in growth in a number of emerging economies, such as Turkey, all carry a certain amount of uncertainty for the eurozone.
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Listen to the entire interview (in Dutch) on the website of Nieuwsuur, 16 August 2018.