In the third quarter, the Dutch economy advanced 0.4% relative to the previous quarter (qoq). This was again a fine figure, although much less strong than in the exuberant second quarter. The figure is roughly in line with expectations and slightly lower than average eurozone growth (0.6% qoq).
Household consumption, investment and exports continue to grow
The clearly lower growth figure was no surprise. A substantial deceleration was widely expected after the exceptionally strong second quarter (1.5% qoq). However, with average qoq growth running at almost 1% in the second and third quarters, the economy was still outpacing the average increase in the three to five preceding quarters.
Most spending components rose further in the third quarter, but generally at a somewhat slower rate than in the second quarter. Stocks decreased however, which dampened growth. Another cause of the much lower figure is that import growth quickened somewhat, whereas export growth decelerated slightly. As a result, the net export contribution (exports minus imports) to GDP growth declined substantially. Both factors jointly accounted for roughly 1% point less growth than in the second quarter.
Outlook remains bright
All confidence indicators improved further in the summer months and in October, suggesting that the economy is still performing well. We therefore assume that growth in the fourth quarter will be slightly higher than in the summer quarter. Average GDP growth in 2017 can then work out at about 3.25%.
The outlook for 2018 also remains bright. We expect the global economy to grow even faster in 2018 than this year. And growth in the Netherlands will receive an extra boost from the strong increase in public spending that has been agreed for next year in the Coalition Agreement.