According to the August data of the Dutch National Statistics Agency (CBS), inflation in the Netherlands reached a new record with 13.6 percent. It is stated that this is the first time that we are faced with such a high rate this year, while GIS data is calculated according to the European inflation calculation method.
High energy prices are cited as the main reason for the record. Natural gas prices continued to rise and energy bills continued to rise in August.
The period approaching this level earlier this year was March with 11.7 percent.
CBS currently forecasts inflation to remain at these levels. While the average inflation rate for this year is 9.9 percent, an inflation rate of 4.3 percent is expected next year. Economists think that poverty will increase in the coming period in this direction.
In the Netherlands, the cabinet is working on a support package for households struggling with rising energy prices.
CBS made this calculation into the European calculation method, the Harmonized Consumer Price Index (HICP). According to the calculation method of CBS, the inflation rate will be published next week.
Fiscal budget 2023 in the Netherlands, Taxes, Health Insurance and Salaries
Fiscal budget for 2023 has been announced in the Netherlands, What Will Change in Our Lives in the New Year? Taxes, health insurance and salaries.
The Netherlands announced its 2023 fiscal budget. Pursuant to the 2023 Budget Draft Law, purchasing power will increase by an average of 3.9 percent next year. However, this year, the people will become poorer by 6.6 percent.
The financial budget draft for 2023, called the “Millions Note”, has been announced.
Details of the Financial Budget for 2023:
1- In 2023, a maximum increase of 10 euros will be made in Health Insurance premiums. The premiums, which are 127 Euros this year, will therefore increase to a maximum of 137 Euros. It will officially announce the decision on Budget Day. Compulsory health insurance contribution will not change in 2021 and will remain at 385 euros.
2- The minimum wage will be increased by 10 percent. 10 percent increase to the minimum wage in the Netherlands! The New Minimum Wage for 2023 has been determined as 1932 euros.
3- Rent, health and energy aids to low-income people will be increased.
4- The amount of scholarships to be given to students will be increased.
5- A budget of 17.2 billion Euros has been allocated to increase the purchasing power of the people.
6- While the taxes of employers will be increased, the tax rate deducted from the employees will be reduced, albeit slightly.
7- Dutch natural gas and electricity will be priced gradually. Those who burn less will pay less, those who burn more will pay more. Thanks to the ceiling price application, an average household will save 2,280 Euros per year and 190 Euros per month.
Annual consumption of 1200 cubic meters of gas and 2400 kilowatt-hours of electricity will be charged at a low price. Over consumption will be subject to a high tariff.
8- General transfer tax rate will be increased from 8% to 10.4% when purchasing residential investors or commercial property.
9- Health benefits are increasing. In 2023, 412 euros will be added to the health allowance, which means an extra 34 euros per month. The maximum health benefit increases to 154 Euros.
10- Housing allowance will increase by 16.94 euros per month structurally.
11- Children’s budget is also increasing. In addition, the maximum repayment of childcare allowance is increasing: to a 96 percent repayment in 2025 (currently 95 percent).
12- Savings up to 57,000 euros per person will be exempt from wealth tax. This was 50,000 euros on tax return in 2021, compared to around 31,000 euros in 2020.
13- Income tax decreases. The rate in the first tranche (for incomes up to around 70,000 Euros) will be reduced. A decrease of 0.11 percent, meaning that the net monthly net employee will receive more. However, employees will not notice much difference because the rate is so low.
14- SCT accijnzen discount from fuel has been extended until July 1, 2023.
15- Students who stay away from home will be given an extra 165 euros as of September 2023.
Next year, the Dutch government will receive 366.4 billion euros in revenue, against a total expenditure of 395 billion euros. Health is in the first place with an expenditure of 105 billion euros. In the income item, it ranks first with 80 billion Euros to be collected in worker taxes and premiums.
The Dutch people will be poor by 6.6 percent in 2022, and their income will increase by 3.6 percent in 2023.
Acting that all problems will end in 2023, the Dutch government predicts that the public’s purchase day will increase by an average of 3.9 percent. For this year, a 6.6 percent decline in average purchasing power is expected.
Euro Dollar Race: All balances are changing!
The dollar continues to strengthen against major currencies as it is seen as a ‘safe haven’ by investors. While the depreciation of the Euro continues; The Euro-Dollar parity declined to the level of 1.0000, and the Euro and the dollar were equalized. This had happened 20 years ago.
As the US currency dollar continues to strengthen around the world, the euro continues to depreciate. EuroDollar parity declined to the level of 1.0000 in the transactions on the second day of the week; saw its lowest level in the past 20 years, thus making 1 dollar equal to 1 euro. This had happened before in December 2002. As of 12:29, the Euro Dollar parity is moving at 1,0004, down 0.35 percent.
EUROPE CLOSE TO THE RECESSION
Europe stands closer to recession than the United States. The Russian-Ukrainian war comes to the fore in this deterioration in the European economy. With the start of the Russia-Ukraine war, the huge increase in energy prices affected the European Union negatively.
THE DOLLAR IS STRENGTHENING IN THE WORLD
The dollar continues to appreciate against all major currencies. With investors turning to the dollar as a safe haven; The dollar index, which measures the value of the US dollar against 6 currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, rose to the level of 108.50, climbing to the highest level in 20 years.
The most important factor influencing the strengthening of the dollar in the world is the decline in the risk appetite… The rise of Covid-19 cases in China and the emergence of epidemic measures; It caused investors to exit risky assets and rise to safe havens. With the decrease in risk appetite, there were decreases in world stock market indices.
The markets focused on the US June inflation figures, which will be announced. The market expectation is that US inflation will reach 9 percent on an annual basis and renew the highest level in 41 years.
The Federal Open Market Committee meeting (FOMC), which determines the Fed’s monetary policy, will be held on July 26-27. Looking at the market pricing, it is seen that the expected rate hike from the Fed is 75 basis points.
Withdrawal of the Rhine River negatively affects the Dutch economy
According to the data of the NU news site based on the Dutch General Directorate of Public Works and Water Management (Rijkswaterstaat), the height measured in the town of Lobith, where the river begins in the Netherlands, decreased to 6.49 meters.
In the news, which stated that this was the lowest water level ever measured, it was noted that the height in mid-August is normally 8.7 meters.
In the news, it was mentioned that the biggest decrease in water flow since the drought in 2018 was experienced.
It was emphasized that the flow of the river decreased to 670 cubic meters per second in the measurement in the town of Lobith.
It was noted that this was the second lowest figure after 620 cubic meters in 1947.
The Rhine River, with a total length of 1230 kilometers, starts in Switzerland. After crossing the French border, passing through Germany, it empties into the North Sea from the Netherlands.
New measures expected
At the beginning of August, the government announced that there was a water shortage in the country and the National Water Scarcity Administration (MTW) was established to control water consumption.
MTW is expected to announce a series of measures next week to maintain access to usable clean water, save water use and reduce losses as river levels drop.
On the other hand, people are warned to use water more carefully in order to maintain access to drinking water and clean water.
Agriculture and maritime transport will be affected
The decrease in the water level in the Rhine due to the drought in Europe is expected to disrupt agriculture and sea transportation the most in the Netherlands, which is struggling with the energy crisis.
It is expected that the productivity in agricultural activities will decrease due to water shortage, and in case of a decrease in the water level in rivers and canals, it is predicted that the domestic sea transportation network may be disrupted.
Due to hot weather and drought in Europe, similar problems are experienced not only on the Rhine, but also on other rivers and important waterways.
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