The year 2022 presented a series of challenges, including the war in Ukraine, high inflation, and soaring energy prices. However, the Dutch government managed to strengthen public finances and end the year in a better state than in 2021. The economic recovery was robust, with the Dutch economy growing by 4.5%, surpassing the European average of 3.5%. These positive outcomes were highlighted in the Central Government Annual Financial Report and the Central Government Annual Report, presented to the House of Representatives by Minister of Finance Sigrid Kaag on Accountability Day.
Minister Sigrid Kaag emphasized the importance of sound financial policy, stating, “We need solid foundations in order to transition to a green economy and take measures to protect nature and the climate, now and in the future.”
Despite additional measures taken in response to the war in Ukraine, the public finances showed improvement at the end of 2022. The EMU balance reflected a small surplus of €88 million, equivalent to 0.0% of GDP, indicating a balance between expenditure and income across the public sector. This positive outcome was attributed to unspent funds and reduced spending on coronavirus measures. The underspend for 2022 amounted to €6.2 billion, an increase of €1.4 billion compared to the previous year. Furthermore, government debt decreased, reaching €480.1 billion, or 51.0% of GDP, compared to 52.1% in 2021.
The management of central government finances in 2022 faced significant challenges, such as the war in Ukraine, the influx of refugees, and compensation for higher energy costs. Despite these complexities, there was improvement in financial management compared to the previous years. The Court of Audit reported a reduction in the financial scale of non-compliance issues, and ministries demonstrated better adherence to procedures for informing Parliament.
In terms of wellbeing, the government emphasized the importance of current and future quality of life in the Netherlands. The central government annual financial report included an overview of wellbeing developments and the integration of wellbeing into the budget system. While the general level of wellbeing in the Netherlands is high, there is room for improvement in certain areas, particularly regarding indicators of ‘later wellbeing’ such as the development of natural capital.
Furthermore, the report acknowledged the unequal distribution of wellbeing across different segments of the population, highlighting the impact of economic capital, social capital, cultural capital, and personal capital on inequality.
To address shortcomings in financial management, a task force was established in mid-2022, focusing on enhancing expertise, procedures, and information sharing. Minister Sigrid Kaag announced that the task force will continue its work to ensure ongoing improvements in financial management within central government.
Overall, the Dutch government’s efforts to stabilize public finances and support economic recovery in the face of unforeseen challenges have yielded positive results, positioning the country for a sustainable and prosperous future.