The Dutch government could continue stimulating the economy into 2011 if there is little or no economic growth, Dutch Finance Minister Wouter Bos said in a television interview on Monday. "We have some measures continuing into 2010. If there is not sufficient recovery in 2011, we will keep doing this," Bos told Dutch TV programme RTL Z.
If economic growth was smaller than 0.5 percent of Gross Domestic Product (GDP), the stimulus would continue, said Bos, who will present the Dutch government's 2009 budget on Tuesday. Although there were signs of a recovery, Bos remained cautious about the medium-term trend, taking into account a scenario where growth could falter again.
"I want to take into account the possibility that unemployment starts rising, new credit writedowns come, and consumers sit on their wallets," Bos said. "A new dip could come when a new wave of prudence takes hold of the economy. Then something that seemed to be a structural recovery was temporary and things could slump again," Bos said. Developed economies would eventually recover but Bos said he expected GDP growth rates to be lower than before the crisis and said many countries would face budget and unemployment problems which would not disappear automatically.
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