By MAARTEN VAN TARTWIJK
AMSTERDAM—Consumers in the Netherlands remained pessimistic about the economy and their personal finances in August, official data showed Monday, suggesting that austerity at home and bailouts for peripheral euro-zone countries are draining the spending power of Dutch households as the country heads toward an election.
The consumer confidence index for August came in at minus 32, unchanged from July, data from national statistics agency CBS showed. CBS said confidence remains “at a very low level” even though it recovered somewhat from June, when the indicator fell to a nine-year low of minus 40.
Consumer sentiment in the euro-zone’s fifth-largest economy has been negative since September 2007 and has deteriorated in the past year in the face of government spending cuts, a slump in the housing market and uncertainty stemming from the euro area’s debt crisis.
Analysts say the negative sentiment will likely weigh on the outcome of the Sept. 12 general elections as voters turn to parties that promise to ditch some of the planned spending cuts. That could threaten a cost-cutting package for 2013 advocated by caretaker Prime Minister Mark Rutte to meet European Union budget rules.
An ad hoc coalition of five parties in April agreed on an austerity package for next year, after Mr. Rutte’s minority government fell over talks on new cost-cutting measures. The austerity package should reduce the Netherlands’ budget deficit to below an EU-prescribed limit of 3% of gross domestic product in 2013.
The measures are meeting resistance from voters, many of whom oppose further belt-tightening when they are also being asked to foot the bill for rescue packages for fiscally stressed governments in southern Europe.
Anti-austerity parties on the far left and right have gained in popularity and could now secure about one-third of the 150-seat parliament, according to several polls released over the weekend.
The Socialist Party, the current front-runner, would win the most seats, about 36, or four more than Mr. Rutte’s Liberal Party, a poll released Sunday by the website Peil.nl showed.
Socialist leader Emile Roemer wants two more years to implement the EU budget rules. “It’s not the pace of austerity that matters, but the quality,” he said Sunday at the launch of his party’s election campaign.
The Dutch economy fell into recession in the second half of 2011 and unexpectedly returned to growth in the first two quarters of this year, mainly due to exports.
Gross domestic product will likely contract again in the third quarter after foreign trade slowed and as domestic consumption remains sluggish, Rabobank economist Ruth van de Belt wrote in an Aug. 14 report.
“Consumers continue to be troubled by tax increases and the weak housing market. Besides that, the coming elections are also causing uncertainty,” she said.
Write to Maarten van Tartwijk at maarten.vantartwijk@dowjones.com
Article source: http://online.wsj.com/article/SB10000872396390443855804577600933867404116.html?mod=rss_economy
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