Amsterdam - The Dutch economy will shrink by 3.5 per cent this year, far worse than anticipated just two months ago, according to a report Tuesday by the Central Planning Bureau CPB.

In December, the CPB had projected a 0.75 per cent economic decline for 2009, but now the outlook is worse, with the global economic crisis having a stronger impact than previously expected.

The CPB predicted unemployemtn rising to 5.5 per cent in 2009 and 8.75 per cent next year. Inflation would drop to 1 per cent in 2009 and remain stable next year. (dpa)