The Dutch economy will continue to outperform its euro zone peers with growth of 3.2 percent this year, falling back slightly to 2.7 percent in 2019, the CPB said. The contribution of private investment to economic growth is also expected to weaken. Netherland's Economic Outlook in Five Charts. Economy - overview: The Netherlands, the sixth-largest economy in the European Union, plays an important role as a European transportation hub, with a consistently high trade surplus, stable industrial relations, and low unemployment. Worldwide, only Singapore, the United States and Hong Kong are ahead of the Netherlands, according to the 2019 ranking of the Global Competitiveness Index prepared by the World Economic Forum (WEF).. Among other things, the measures concern the gradual introduction of a two tax bracket system for income tax and changes to the employed persons’ tax credit. Could you maybe inform us why you do not like this article? Organisation for Economic Co-operation and Development (OECD), Access Economic Policy Reforms: Going for Growth, 2 July 2018 - Economic Survey of the Netherlands, © Scaling down mortgage interest deductibility beyond current plans would help address the debt bias but this needs to go hand-in-hand with more affordable rental opportunities. The rise of self-employment in the Netherlands: is the “polder model” at risk? Could you maybe inform us why you like this article? At the same time, the Cabinet has announced that households will pay lower energy tax with effect from 2020. Household debt remains high, even though households have positive net worth. Increased trade tensions between the US and the EU would also be negative for Dutch exports. The same effect causes a positive growth figure for housing investment in 2019. © 2020 International Monetary Fund. But the most serious problem, and probably less temporary in nature, has been the weak condition of trade. But real wage and productivity growth have been slow, possibly exacerbated by the increasing share of short-term labor contracts. Economic Indicators for Netherlands including actual values, historical data, and latest data updates for the Netherlands economy. Household income is still rising, amongst others because employment will continue to increase. Generating the PDF can take several minutes to complete. Part of this higher income will be offset by higher prices, which increase significantly, especially in 2019. In addition, consumers are not only facing higher prices on average, they are also seeing many different price increases. We expect global economic growth to decline further in the coming years. The result is that unemployment is expected to increase slightly from next year, from 3.6 percent in 2019 to 3.7 percent in 2020. The Dutch economy has now passed the high point in the cycle, and growth in 2019 and 2020 will be close to its structural rate. OECD Home Economy Netherlands Economic Snapshot. Growth in the Netherlands has picked up and unemployment has fallen sharply in recent years. In the meantime, Dutch demand for foreign products and services is growing faster than the reverse, meaning that the Dutch trade balance is deteriorating[1]. In 2018 the government spent over EUR 3.7 billion less than permitted under the agreed spending ceiling, partly due to delayed infrastructure projects and lower than budgeted care costs. And the same applies indirectly if there is an escalation in the conflict between the US and China. Sitemap, {{consultant.meta_information.display_name}}, {{consultant.meta_information.office_name}}. In this respect, it is good that the Cabinet is providing more clarity regarding its climate policy, such as a proposed tax on CO2 emissions for the most polluting businesses. Copyright © 2020 Rabobank/RaboResearch, Utrecht. 5 years of Netherlands economic forecasts for more than 30 economic indicators. Attention! We expect GDP volume to grow by 1.6 percent in both years, which is lower than our previous forecast. Top Losers in 2019: Out of 193 economies estimated by IMF, GDP of 72 economies has decreased in 2019 compare to 2018. February 14, 2019. Use "AND" and/or "OR" to get better search results. The Commission publishes a full set of macroeconomic forecasts for the EU and its Member States in spring (May) and autumn (November) and publishes interim forecasts updating GDP and inflation figures in winter (February) and summer (July). We do however expect the increase in employment to slow. Was this page useful? Google+, Facebook Netherlands Economic Snapshot. Shopping is more expensive due to the VAT increase, energy bills will be higher this year and health care premiums were raised with effect from 1 January. Not only is there the prospect of a higher increase in government spending and investment, mainly in education, infrastructure and defense, government spending also has a higher weight in general GDP growth (figure 6). The tax cuts planned for 2019, and the larger cuts planned for 2020, will moreover positively affect households’ ability to spend. Online Store But it is unlikely that Dutch people will be as optimistic as they were in the first half of 2018. Consumer confidence came in at minus 28.0 in September, up from August's minus 29.0. My Cart Business investment is still likely to continue to increase after a couple of weak quarters in 2018. Nevertheless, unemployment will remain at a low level compared with other years (figure 3). Positive labour market developments, supportive fiscal policy and a stronger housing market have boosted private consumption growth. Dit artikel is ook beschikbaar in het These proposals could give consumer confidence a positive impulse. The economy is in the midst of a strong expansion. Economic Forecast Summary (June 2020) Access The Netherlands Projection Data; Access Projection Data and Analysis ; Reform Priorities (July 2019) 2017 Reform Priorities ; Access Economic Policy Reforms: Going for Growth, Report; 2 July 2018 - Economic Survey of the Netherlands. Many people have found a job in the past years, and the pool of people who are still employable is now drying up. Attempts to fully use the available fiscal space in 2018 were unsuccessful due to difficulties with hiring against a background of low unemployment. Press This means consumption growth will be significantly lower than in 2018, but also that it will remain relatively strong compared to the past fifteen years (figure 2). The government debt will fall by €6 billion, to 49.6% of GDP. Given the favorable developments in the labor market, it is notable that consumer confidence has fallen so sharply in recent months. The IMF Press Center is a password-protected site for working journalists. Actually, we expect to see a mild recession in the US in 2020. After all, the government has the room to increase spending under the budgetary rules. before it. Growth in the Netherlands has picked up and unemployment has fallen sharply in recent years. and Carlijn Prins. Construction companies are finding it difficult to hire new personnel and the number of building permits granted is stagnating. Industry focuses on food processing, chemicals, petroleum refining, and electrical machinery. If we actually have a hard Brexit (the chances of which remain uncomfortably high) or international trade tensions escalate, the Dutch economy will also be negatively affected. Improve your search results by searching on Author and Title at the same time. This can lead to an increase in consumption. A second reading of national accounts data confirmed the dismal performance of the Dutch economy in the second quarter, with GDP falling a record 8.5% quarter-on-quarter on a seasonally-adjusted basis (Q1: -1.5% qoq s.a.) and plunging the economy into its first recession since the second half of 2012. Not useful. Next year, inflation will likely fall back to 1.7 percent. Twitter Nederlands, March 20, 2019, by Among top ten largest economies, five show decline in current GDP figure. The development of global trade is under pressure, and as an open economy, the Netherlands is particularly exposed to this. However, wages grew moderately, and inflation remained subdued. Netherlands - Netherlands - Economy: Since World War II, the Netherlands has been a highly industrialized country occupying a central position in the economic life of western Europe. Several factors are supporting private households’ consumption: the unemployment rate is, with 3.5% in the autumn of 2019, at one of the lowest levels since the beginning of the statistic in 2003. On the other hand, government spending could rise by more than we currently expect. Do you want us to respond to your remarks? In 2017, the Swiss International Institute for Management Development ranked the Netherlands the fifth most competitive economy in the world. However, returns on a rising net foreign assets position will preserve the large current account surplus over the medium term. Growth will be down only slightly in 2020 and will continue on the 2019 growth pattern with private consumption (44% of GDP) being its main contributor. We therefore expect labor market tightness to lead to nominal wage growth this year and next. At the same time, the inflow of new employees such as recent graduates is expected to remain steady. GDP Growth Rate in Netherlands averaged 0.45 percent from 1988 until 2020, reaching an all time high of 1.70 percent in the first quarter of 1999 and a record low of -8.50 percent in the second quarter of 2020. Part of the increase in employment will be filled by older people working for longer due to the increase in the state pension age. Promoting the growth of small and medium-sized enterprises should focus on expanding direct support to research and development, investing in digitalization and lifelong learning, and establishing a business credit bureau. Economic growth in the Netherlands will depend more heavily on government spending, Net exports will not drive growth in the years to come. TIP! Useful The Dutch economy has grown faster than the euro area average over the past few years, reflecting recovering consumption and investment, and strong net exports. Business confidence rose to minus 5.4 in August from July's minus 8.7. The economy is in the midst of a strong expansion. We expect GDP volume to grow by 1.6 percent in both years, which is lower than our previous forecast. In February, this index actually fell below zero for the first time in four years (figure 4). We are less optimistic with respect to the development of housing investment: over the next two years, we expect this to remain more or less at the same level as at the end of 2018. While near-term budget plans imply greater spending, over the medium-term substantial fiscal space will re-open with public debt projected to decline below 40 percent of GDP by 2024. A hard Brexit would substantially affect the Dutch economy through (among other things) trade relations. Partly as a result, the total labor supply will rise slightly faster in 2020 than the number of jobs. The current account surplus remains high at almost 10 percent of GDP, reflecting high corporate savings by mostly multinational corporations residing in the Netherlands. Organisation for Economic. They will probably be more cautious when it comes to making big ticket purchases and they may save a bit more. Ester Barendregt The Netherlands has the most competitive economy in Europe for the first time. Italy is actually in recession, while Germany only just avoided a recession at the end of last year. There have also been problems in the auto industry as a result of the new emissions standards, which has affected suppliers as well. A highly mechanized agricultural sector employs only 2% of the … Netherlands: Economy contracts at strongest pace on record in Q2 September 23, 2020 A second reading of national accounts data confirmed the dismal performance of the Dutch economy in the second quarter, with GDP falling a record 8.5% quarter-on-quarter on a seasonally-adjusted basis (Q1: -1.5% qoq s.a.) and plunging the economy into its first recession since the second half of 2012. Consumers thus may perceive inflation to be higher than it actually is. This will most likely make it more difficult for businesses – 26 percent of which are already complaining that a shortage of people is limiting their activities – to find workers.