Dutch economy to take longer to recover: Central Bank

(THE HAGUE) - The Dutch economy will take longer than expected to recover and will remain above the European Union's deficit target for at least the next two years, the Dutch Central Bank said Monday.

Contrary to earlier predictions, the eurozone's fifth-largest economy is expected to shrink by 0.6 percent next year, before bouncing back with 1.0 percent growth in 2014, the DNB said in a statement.

The central bank expects the Dutch economy to shrink by 1.0 percent this year.

At the same time, the Dutch public deficit is predicted to drop from 4.1 percent this year to 3.5 percent of gross domestic product in 2013 and 2014, keeping it above the EU's target ceiling of 3.0 percent.

"These less favourable estimations are based on unforseen setbacks within Dutch gross domestic product for the third quarter," down 1.1 percent on the previous quarter, the DNB said.

"The world economy is also doing worse than predicted six months ago," it added.

"Next year Dutch global trade will grow only by 3.5 percent where as in June it was still estimated at 7.8 percent."

But a silver lining will come in 2014, the DNB said when economic growth will return thanks mainly to an upturn in global markets.