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Dutch government ran first surplus in 2016 since financial crisis
March 24, 2017 / 6:35 AM / 6 months ago

Dutch government ran first surplus in 2016 since financial crisis

AMSTERDAM (Reuters) - The Dutch government ran a budget surplus of around 3 billion euros, or 0.4 percent of GDP in 2016, its first surplus since the 2008 financial crisis, Statistics Netherlands (CBS) said on Friday.

The news may play a role in talks as Prime Minister Mark Rutte tries to form a new centre-right coalition after March 15 elections that saw support for current junior partner Labor truncated.

Potential partners in the new coalition are pushing for spending increases on healthcare and the environment.

The CBS said that net debt fell to 62.3 percent of GDP as a result of the surplus, close to the limit of 60 percent specified by eurozone rules, which few have achieved.

The agency said that the unexpected surplus came from a rise in revenues after several years of accelerating growth, not any spending restrictions.

“Growth shows up in corporate taxes with a delay because losses from earlier years are deducted from profits,” the agency said in a review of 2016.

“When this reservoir of losses has dried up, corporate taxes can rise very quickly as happened in the past year.”

Reporting by Toby Sterling; Editing by Kim Coghill

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