Government budget no longer in the red for the first time since the corona crisis

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The government recorded a budget surplus of 7 billion euros in the first quarter of this year, Statistics Netherlands reported on Friday. This is the first time since 2020 that the government has written black numbers again. This is due to the strong economic growth which has led to an increase in tax revenues.

The Dutch economy barely grew in the first quarter of this year, but last year our country recorded the strongest growth in more than twenty years. This is mainly due to the increase in exports and the increase in household consumption. This higher consumption continued in the first three months of this year, leading companies to post record profits.

The combination of all of this led to more tax revenue, which pushed the budget out of the red, says CBS chief economist Peter Hein van Mulligen.

In 2020, the Netherlands still had a deficit of 34 billion euros. At the time, this was mainly due to the substantial support programs that the government had to give to businesses due to the mandatory closure, when hardly any taxes were coming in. These subsidies continued last year and the first three months of this year, but the impact on the budget was much lower, according to Van Mulligen, due to the strong growth.

Debt also fell by 3 billion euros to 446 billion euros. This represents 50.7% of gross domestic product (GDP), the most commonly used measure of economic activity in a country. A year ago, this debt still amounted to 55% of GDP. The EU requires countries to keep their debt below 60% of GDP.

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