The budget deficit of the Netherlands could rise to 11.8% of GDP

The budget deficit of the Netherlands could rise to 90 billion EUR, or up to 11.8% of the country’s gross domestic product (GDP) in 2020, due to increased costs to counteract the financial impact of the coronavirus outbreak, according to the Treasury.

The ministry added that the data was a “first, rough estimate”. “The cabinet expects a significant economic contraction, which can rely on much less tax revenue and, in addition, will spend a lot of money on support measures”, the Treasury said

So far, the measures include tax suspensions, support for companies that have lost revenue from spreading the virus to help them pay up to 90% of their workers’ pay, and a series of corporate loan guarantee programs.

The Dutch government, which prides itself on fiscal prudence, said debt-to-GDP ratio is likely to rise to 65.2% this year, higher than theoretically allowed under EU rules (EU), but lower than the average for the bloc countries.

To date, the Netherlands has registered 36,535 cases of coronavirus-infected cases, with the number of fatalities reaching 4,289. The country ranks 14th in the number of infected worldwide, as well as 6th among EU countries.