Finance minister Heinen: Sound figures should be viewed with caution given international situation

News item | 21-05-2025 | 12:04

Today, minister of Finance Eelco Heinen officially presented the accountability documents to the House of Representatives, on what is known as ‘Verantwoordingsdag’ (Accountability Day). He emphasised the current geopolitical situation, telling parliament: ‘We are once again presenting the annual financial report against the backdrop of serious international tensions. The ongoing war in Ukraine and the import tariffs announced by the United States have led to significant uncertainty. That could have an impact on our open economy and, as a consequence, on the budget. So we shouldn’t be overly optimistic. It is important to take a prudent approach to managing the public finances and continue working to restore budget discipline.’

The economy, inflation and purchasing power

The economy was buoyant in 2024. The economy grew by 1% over 2024, exceeding the forecast by the Netherlands Bureau for Economic Policy Analysis, which had expected 0.6% growth. Unemployment remained at a historic low (3.7%). Inflation (3.3%) exceeded the euro area average of 2.4% and wages increased by an average of 6.7%. Purchasing power rose by 2.9%, also surpassing expectations.

Government budget deficit and government debt

In 2024 the public finances proved to be in a better state than had been expected at the start of the fiscal year, in part because some expenditure was deferred to future years. As regards the EMU balance, the budget deficit  over 2024 amounted to €10.1 billion, which is equivalent to 0.9% of GDP. The deficit had been projected at 2.9% of GDP in the Budget Memorandum for 2024. At the end of 2024 the government debt (EMU debt) was €491.6 billion, or 43.3% of GDP, which is relatively low viewed in a historic perspective. However, it is expected to increase in the coming years. With these numbers, the Netherlands remains well within the EU reference values for the deficit (3% of GDP) and the government debt (60% of GDP), which are set out in the Stability and Growth Pact (SGP).

Receipts and expenditures

In 2024 receipts from taxes and social insurance contributions were largely in line with expectations. On the expenditure side of the central government budget, planned expenditures totalling €17 billion were either deferred or not fully spent in the course of the year (underspend). This was primarily due to unrealistic ambitions and persistent labour shortages. The government remains committed to pursuing more realistic ambitions and plans in the budget process. The expenditure deferrals in 2024 were part of that approach.

Regularity

In 2024 the regularity of the Netherlands’ public finances improved on the whole. The regularity percentages for expenditures (99.67%) and receipts (99.94%) are well within the error tolerance limit of 1% applied by the Netherlands Court of Audit. The regularity percentage for obligations (98.94%) slightly exceeded the limit, despite some improvement. The Court of Audit observed a total of 40 irregularities, three of which were serious.

The Central Government Annual Financial Report, ministerial annual financial reports and all other accountability documents can be accessed (in Dutch) at www.rijksfinancien.nl.