June 18, 2020 / 10:35 AM / 2 months ago

Coronavirus effects aside, Dutch poverty still forecast to rise

AMSTERDAM, June 18 (Reuters) - Poverty in the Netherlands is set to rise even before considering the impact of the global coronavirus outbreak, the social and cultural planning bureau (SCP) said on Thursday.

The Netherlands is one of Europe’s wealthiest nations, but around a million of its 17-million population live below the poverty threshold, defined as income of less than 1,135 euros ($1,277) per month.

The SCP forecast that that number will rise by 25% in the coming decade if current government policies were continued, due mostly to plans to phase out unemployment benefits through to 2035.

That calculation was made before the coronavirus struck, and the agency warned it could lead to a worse outcome than the aftermath of the 2008 financial crisis, when Dutch poverty peaked at 1.2 million people.

“The blow of the recession may be harder this time because of the increased number of people with flexible labour contracts and individual contractors with no protections and few reserves,” the SCP study said.

In a debate in parliament, Dutch politicians said they were shocked by the results of the study and demanded a government response.

French trade credit insurer Coface on Thursday forecast a 36% increase in Dutch bankruptcies in the second half of 2020 as a result of the coronavirus, the largest increase it forecast in Europe outside of Britain.

Coface cited its own risk analysis and the Dutch economy’s large exposure to trade and transport.

Earlier this week, the Dutch government forecasting agency CPB said the economy would shrink 6.4% in 2020 before rebounding in 2021. ($1 = 0.8888 euros) (Reporting by Toby Sterling; Editing by Nick Macfie)

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