One in three at risk of financial problems as cost of living rises

The number of people living in poverty is set to grow this year as high inflation and energy prices start to bite, the government’s economic planning agency CPB has said.

The agency’s latest figures predict 7.6% of people will be living below the poverty line by the end of 2023, up from 5.7% in 2021 and 6.7% this year. The projected figures are even higher for children, with almost one in 10 living in poverty next year.

Inflation will continue to hover around the 10% mark for the rest of 2022 before easing to 4.3% next year – still the highest level since the 1980s – while purchasing power is set to crash by minus 6.8% this year before recovering in 2023.

The CPB warned that the figures were likely to be an underestimate because poorer households will be disproportionately hit by rising energy bills.

‘I’ve never seen figures like these before, this is dramatic,’ CPB director Pieter Hasekamp told NOS. ‘Especially for people who already have it tough and soon won’t be able to pay their energy bills.’

Foreign affairs minister Wopke Hoekstra said the government would have to find at least €10 billion for ‘quick, robust and effective’ measures to offset the rapidly rising cost of living.

‘One in three people in the Netherlands faces short-term financial problems,’ he told AD. ‘People get a fright at the supermarket checkout, to say nothing of their energy bills. We have to stop people falling through the ice.’

The CPB figures also predict that unemployment will continue to fall this year to 3.4%, before rising slightly to 3.9% this year. The median wage is set to hit €40,000 next year, up from €38,000 in 2022.

Hoekstra said the business sector needed to play its part in alleviating the cost of living by raising wages. ‘Three-quarters of companies are making bigger profits than before the pandemic,’ he said. ‘So it’s only right to expect companies to increase wages. In the end we all need to get through this crisis together.’