AMSTERDAM (Reuters) - The Dutch economy will grow by 2.6 percent next year, leading to rising wages and a further decline in unemployment, King Willem-Alexander said on Tuesday in an annual state of the union speech outlining the national budget.
Economic growth will fall slightly from the decade-high levels of just under 3 percent reached in 2017 and expected again for this year. Meanwhile, unemployment is set to drop to a historically low level of 3.5 percent.
"People will have more to spend next year, which is good for the strength of our society," the king said in a speech prepared by the Dutch government.
"Wages are rising, people are finding new jobs again, are building their career or are expanding the number of hours they work."
In its 2019 budget, the government increases spending on education, healthcare and the military, while also promising an extra 2 billion euros for infrastructure projects in the next three years.
Despite this extra spending, the budget surplus is set to rise to 1.0 percent of GDP in 2019, while government debt will fall to 49 percent of GDP.
The budget also includes a contentious plan to scrap a 15 percent withholding tax on dividends, which opponents see as a tax break for foreign investors.
A recent poll indicated that only 11 percent of voters support scrapping the tax, but government memos showed that getting rid of it was viewed as a deal-breaker for Unilever <UNc.AS> <ULVR.L> in choosing Rotterdam, rather than London, to base its single headquarters.
(Reporting by Bart Meijer, Writing by Anthony Deutsch, Editing by William Maclean and Ed Osmond)