Dutch government think-tank forecasts recession next year

Special Report:Global Financial Crisis　

BRUSSELS, Dec. 8 (Chinese media) -- The Dutch economy is set to sink into recession next year, for the first time since the early 1980s,the government's economic policy think-tank Netherlands Bureau for Economic Policy Analysis (CPB) said on Monday.

The organization forecast a 0.75 percent decline of GDP in 2009and said companies which depend on exports will bear the brunt of the downturn, Dutch daily NRC Handelsblad reported.

The economy will pick up again in 2010, with growth reaching 1 percent, the organization said.

"Nevertheless, the uncertainty surrounding the timing of the recovery remains great," the CPB said, adding "financial crises tend to last longer than a dip in the economic cycle."

The Dutch economy grew 3.5 percent last year, and the growth rate in the first three quarters this year were 3.3 percent, 3 percent and 1.8 percent, respectively.

In September, the CPB predicted that the economy would grow by 1.25 percent next year.

The new figures also indicate that unemployment is set to rise to 6.5 percent, or by 200,000 people, by 2010. Currently, the official Dutch unemployment rate is around 2.6 percent, the lowest in Europe.

But the CPB said that "lower commodity and energy prices will dampen inflation, which will benefit spending power." On average, spending power will rise 1.75 percent next year, with inflation falling to 1.5 percent.