The second quarter saw the Dutch economy grow by 0.7% relative to the previous quarter (qoq). This was slightly more growth than in the first quarter. The growth rate was a little higher than the market had expected and landed above the average eurozone growth rate (0.4% qoq).
Growth mainly driven by foreign trade
Gross domestic product (GDP) increased slightly more than in the previous quarter (+0.6% qoq in Q1). This was mainly attributable to exports returning to expansion mode after contracting in the first quarter. Moreover, exports now also significantly outpaced imports, whereas the roles had been reversed in the previous quarter. As a result, the net export contribution (exports minus imports) to GDP growth swung from roughly -0.7% point to +0.8% point.
Domestic spending somewhat lower after very strong first quarter
Investment rose, but less than in the previous quarter. Household consumption showed no growth, although these expenditures had posted rather robust growth in the first quarter. As inventory accumulation was substantially lower than in the first quarter, domestic spending fell a little overall. But again: this should be seen against the backdrop of strong domestic spending growth in the first quarter.
Outlook still fairly favourable
Dutch confidence indicators have dropped from their extremely elevated levels in February, but remain high. For this reason, we expect the economy to keep growing, although growth may slow down a bit. Just under 3% growth still looks feasible for full-year 2018.