In the last quarter of 2019 the Dutch economy again grew 0.4%. That was better than expected and also more than average eurozone growth.
Growth mainly driven by consumption and investment
Gross domestic product (GDP) advanced in the fourth quarter – according to provisional figures – by 0.4% compared to the previous quarter (qoq). That was the same increase as in the preceding three quarters of 2019. Fourth-quarter growth was virtually entirely attributable to domestic spending. Foreign trade only made a small contribution. Average growth for full-year 2019 came to 1.7% (2.6% in 2018).
Domestic spending showed an increase, except for inventories. Private consumption growth rebounded (qoq) after a meagre third quarter, while government consumption also rose further, albeit less than in the summer. Investment also expanded strongly after the slight contraction in the preceding period. The increase was partly thanks to the investment in means of transport. In anticipation of tax measures effective from the start of 2020, car sales accelerated significantly at the end of last year. Residential investment, by contrast, showed a sharp decline.
Small contribution of net exports to growth
Imports and exports advanced further (q-o-q). Both grew less than in the third quarter, though exports slightly outpaced imports. The consequence was that, as in the previous quarter, net exports (exports minus imports) made a modest contribution to GDP growth.
Growth likely to decelerate
We expect growth to be lower in the first quarter of this year. The further decrease in various sentiment indicators underpins this assumption. In addition, investment will probably fall back at the start of this year after the strong increase at the end of 2019. The corona virus is also likely to have a dampening effect on growth. However, due to the catch-up effect in the subsequent quarters, the corona virus is only expected to have a very limited impact on average GDP growth in 2020.