May 29, 2007 - The Dutch government expects to reach a budget deficit of minus 0.7 pct of gross domestic product for 2007, down from last year's forecast for a surplus of 0.2 pct of GDP, according to a report from the ministry of finance.

The ministry said in its spring memorandum the change was primarily caused by a drop in the government's estimated natural gas revenues (minus 0.5 pct of GDP) due to warmer temperatures during this year's mild winter.

Other factors include the first phase of the previous government's plan to assume the debts of the Netherlands Antilles, an autonomous nation within the Netherlands (minus 0.1 pct of GDP) and higher-than-expected healthcare costs (minus 0.2 pct of GDP).

The memorandum also noted a budget surplus at local government level of 0.1 pct of GDP, adding it expects the deficit to improve in 2008.