Dutch Economy in Focus – Economic boom continues

by: Nico Klene

  • Dutch economy set to grow a further 3¼% in 2018, more than we expected several months ago
  • Record-high economic barometers signal accelerating growth early this year
  • We recently revised up our eurozone and US growth forecasts for 2018 and 2019. This, plus the improving economic barometers, also led us to raise the Dutch growth forecasts
  • Exports, consumption, investment and the strong government spending impulse (as set out in the Coalition Agreement) will keep the economy on the same strong growth track this year
  • Amidst slowing world trade expansion, Dutch economic growth will probably dip somewhat in 2019, but still remain robust at just over 2½%
  • Vigorous jobs growth will push unemployment to 3½% of the labour force, the same low level as achieved during the previous boom
  • Inflation will edge higher in 2018 as wage growth­ and rents pick up pace, before jumping in 2019 when the low VAT rate is raised
Dutch-Economy-in-Focus-Mar18.pdf (782 KB)
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Summary

Dutch economy firing on all cylinders

The Dutch economy is on a roll. Gross domestic product (GDP) gained 3¼%[1] last year and a similarly strong figure is expected this year. Last year, the Dutch economy benefited from a stronger rise in exports thanks to an acceleration in global­ trade. Moreover, domestic spending in general, and investment in particular, also gathered pace.

This favourable picture will continue to hold sway. Strong global trade growth and higher government spending indicate that Dutch GDP is firmly on track to rise by another 3¼% or so this year. The positive mood indicators also confirm that the economy retained its strong growth momentum in the first months of the year. Accordingly, we have raised our growth forecasts.

[1] This figure refers to the GDP series adjusted for seasonal and calendar effects. According to the unadjusted series, GDP rose by 3.1%.