Dutch economy to shrink in 2012, budget cuts needed

THE HAGUE: The Dutch economy will contract 0.5 percent in 2012 after expanding 1.5 percent in 2011, economic analysis bureau CPB said on Tuesday, and the budget deficit will exceed 3 percent of GDP both this year and next, requiring further spending cuts.

The Netherlands' Bureau for Economic Policy Analysis (CPB), which advises the Dutch cabinet, sharply revised its forecasts to reflect the deteriorating environment in the euro zone in a report released on Tuesday.

The previous report was published in September.