Dutch Government Urges Caution Amid High Inflation

The Dutch government aims to exercise caution to maintain fiscal stability, citing high inflation as a reason to reduce spending. Finance Minister Heinen emphasized the necessity of fiscal prudence, warning against excessive expenditure in response to recent inflation data.

As of December, the inflation rate in the Netherlands was 4.1%, significantly exceeding the target of 2%. Factors contributing to high inflation include low European interest rates and government spending.

The Dutch central bank, DNB, believes it’s crucial for the government to limit spending to curb inflation. While Heinen’s VVD party supports a conservative fiscal approach, coalition partners NSC and BBB may have differing views, particularly regarding support for vulnerable groups.

The coalition must reach a consensus in upcoming discussions on the spring budget update for 2025. Heinen remains optimistic, stating, “We will sort it out carefully.”

Source: NOS

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