The Dutch government is facing a mixed financial outlook as it prepares its spring budget update, with lower-than-expected health care spending offsetting significant cost increases in social security and asylum.

Health care expenditures are projected to be between 800 million euros and 1 billion euros lower annually than previously estimated, according to sources cited by RTL. The reductions apply to both elderly care and general health services and are detailed in the spring memorandum drafted by Finance Minister Eelco Heinen, which is set for discussion in the Cabinet on Friday.

The financial relief is reportedly further supported by stronger-than-anticipated economic growth, which is driving higher tax revenues. Increased business turnover has led to higher corporate tax income, easing pressure on the national budget.

As a result, additional spending cuts now appear unnecessary. However, the budget deficit is still expected to rise to 2.9 percent of gross domestic product, just below the European Union’s agreed ceiling.

These gains are counterbalanced by substantial financial setbacks. The most significant is a surge in social security costs, exceeding 1 billion euros, driven by a growing number of people receiving disability benefits. The increase has raised concerns within the Cabinet.

Heinen said last week in an interview with RTL Z that “there is a setback of more than a billion euros due to an increase in the number of people on disability benefits.”