(Adds updated economic projections)
AMSTERDAM, Sept 15 (Reuters) – The Dutch government will maintain heavy spending in an effort to counter the effects of the coronavirus pandemic despite a rapid deterioration of the state finances, its draft budget for 2021 showed on Tuesday.
The budget deficit is set to balloon to 7% of gross domestic product this year and 5.5% in 2021, while national debt is expected to hit 62% of GDP next year, as support for workers and companies struck by the pandemic is extended well into 2021.
“In these insecure times, the government chooses not to cut spending but to invest in job security, social safety nets and a stronger economy,” King Willem-Alexander said in his annual speech presenting the government’s new budget.
The Dutch economy is expected to shrink by an unprecedented 5% this year before rebounding by 3.5% in 2021, said the government’s main economic policy