April 24, 2020 / 1:35 PM / a month ago

Dutch 2020 deficit could reach 11.8% of GDP: government

AMSTERDAM (Reuters) - The Dutch government’s budget deficit could rise to 90 billion euros ($97 billion) or 11.8% of GDP in 2020 because of spending to counter the financial impact of the country’s coronavirus outbreak, the finance ministry said on Friday in a statement.

The ministry said those numbers were a “first, raw estimate.”

“The cabinet expects a heavy economic contraction, can count on much less tax income, and in addition will spend a lot of money on support measures.”

Measures to date include a suspension of tax payments, support for companies that have lost revenue due to the virus to help them pay up to 90% of workers salaries, and a series of corporate loan guarantee programmes.

The Dutch government, which prides itself on fiscal prudence, said its debt-to-GDP ratio was likely to rise to 65.2 percent this year, higher than theoretically allowed under European Union rules, but lower than the EU average.

In March, the government said it would need to borrow up to 55 billion more than it previously planned to pay for the measures.

Reporting by Toby Sterling; Editing by Jon Boyle and Barbara Lewis

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