The Russo-Ukrainian War led to a decline in Dutch purchasing power

According to calculations by the Dutch Central Statistical Office (CPB), the purchasing power of Dutch residents is likely to fall by more than 3% this year, in part due to the outbreak of war in Ukraine. The Russian-Ukrainian conflict has triggered a sharp rise in energy prices, exacerbating inflation that was already strong under the COVID-19 pandemic.

CpB expects the purchasing power of Dutch residents to decline by an average of 3.4% in a worst-case scenario; in a medium-level scenario, CPB would see a 2.7% drop in purchasing power based on its latest major economic assessment; and at its best, purchasing power would fall by 0.6%. In the above calculations, the CPB assumes inflation rates of 6%, 5.2% and 3%, respectively.

The CPB said the economic impact of the war on other areas, such as trade, financial markets, and investment and consumption, remained limited. CPB mathematicians believe that the economy will continue to grow in the coming years, although growth will not be as strong as it rebounded from the contraction in the first coronavirus year in 2021.

CpB expects the economy to grow by 3.6 percent this year and 1.7 percent next year. Growth in the coming years will be driven by additional government investment in joint agreements. The labor market will remain tight, so the unemployment rate is likely to rise slightly.

Dutch Prime Minister Rutte: War inevitably hits The Dutch purchasing power

Dutch Prime Minister Rutte said it was almost inconceivable that the government would be able to stem the decline in household purchasing power this year, and that it was "illusory" for the government to make assurances about it.

As a result of the war in Ukraine, already high energy and fuel prices have risen further in recent days, the government is still considering measures to minimize the impact on citizens, Rutte said.

The war, According to Lutte, created "a very different reality that had a profound impact on the world in which we live." He explained that large-scale disruptions in supply lines, energy supplies and international capital flows will inevitably have an impact, "which is still difficult to foresee, but I do not rule out the possibility that it will have a significant impact." ”

Socialist Party (SP) leader Lilian MC Marijnissen argues that the cabinet has not delivered on its promises on purchasing power. She wants to lower energy taxes and shift to large corporations and high-income people. The leader of the GroenLinks, Jesse Klaver, called on the cabinet to freeze energy prices.

Mr. Lutte said the cabinet was prepared to "press all buttons" to control the decline in purchasing power.

This article is compiled by China-Netherlands Business Daily, and may not be reproduced and edited without permission!

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