Assessing Dutch Fiscal and Debt Sustainability

Author/Editor:

Benjamin Carton ; Armand Fouejieu

Publication Date:

December 4, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Although the Netherlands entered the so-called Great Lockdown with a strong fiscal position, the Dutch fiscal balance is projected to deteriorate by an unprecedented magnitude, largely as a result of necessary fiscal measures deployed to weather the economic impact of the COVID-19 pandemic. This paper performs a stochastic analysis of risks to Dutch fiscal and debt sustainability over the next decade, taking into account alternative recovery scenarios and associated fiscal consolidation paths and also a range of macroeconomic shocks drawn from the historical experience of the Netherlands. The simulations show that even under significant downturn scenarios and assuming an initially less favorable fiscal position due to persistent economic effects of the pandemic, risks to the Dutch fiscal and debt sustainability would remain contained.

Series:

Working Paper No. 2020/269

Frequency:

regular

English

Publication Date:

December 4, 2020

ISBN/ISSN:

9781513557496/1018-5941

Stock No:

WPIEA2020269

Format:

Paper

Pages:

26

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