Rabobank does not believe the cabinet can achieve its goal of growing the Dutch economy by 1.5% per year with its current investment plans. Chief economist Otto Raspe of RaboResearch made the comments on Wednesday, a day after Budget Day, during the Millions Breakfast in Amsterdam, organised by VNO-NCW Metropolitan Region Amsterdam.
On Tuesday, the cabinet announced billions of euros in additional funding for areas including innovation and a new investment institution. However, Raspe said these investments would not be enough to deliver 1.5% structural economic growth.
According to Raspe, reaching that target would require the government and the business community to invest an average of €20 billion per year in areas such as education, research and development. He described the annual amount as “substantial, but then you just reach that 1.5 per cent growth”.
As part of its Budget Day plans, the cabinet announced the creation of a National Investment Institution, backed by an investment of €3.3 billion. It also allocated €500 million to a specialised agency that will help prepare market applications.
Rabobank recently forecast economic growth of 1.3% this year and 1.1% next year. The bank expects increased government spending and consumer spending to be the main drivers of growth.
Raspe also warned that Dutch national debt is rising rapidly. He said the Netherlands could soon be paying €30 billion a year in interest on its national debt, partly because of higher interest rates.
“That is 30 billion that you cannot invest in society or the economy,” he said.
@anp | NEWS BRAINPORT
