Consumption in Netherlands
Netherlands - Consumption
Economy picks up steam in the fourth quarter
In defiance of the general European trend of moderating economic growth, the Dutch economy shifted into a significantly higher gear in the fourth quarter. Economic growth came in at 0.5% quarter-on-quarter, up markedly from the meager 0.1% growth rate recorded in the third quarter. The economy was buttressed by firming domestic demand and an improved trade balance. In year-on-year terms, economic growth eased from 2.4% in the third quarter to 2.0% in fourth quarter.
In the fourth quarter, domestic demand picked up pace compared to the prior quarter. Private consumption swung from a flat reading in the third quarter to a 0.5% expansion, benefiting from another drop in the unemployment rate, an increase in employment and elevated consumer confidence amid a stable inflationary environment. On the flip side, Marcel Klok, senior economist at ING, noted that “the labour market is already starting to become a supply side restriction to growth.” Furthermore, government consumption also increased from a flat reading in the previous quarter to a 0.5% expansion, while fixed investment growth rebounded from a 0.1% contraction in the third quarter to a 0.7% increase in the fourth quarter.
Although the trade balance provided a positive impulse to national accounts, the reasoning behind it is less cause for celebration. Exports of goods and services contracted 1.3% over the previous quarter in the fourth quarter, contrasting the 1.1% expansion logged in the third quarter. Exports of both goods and services fell, with the latter contracting at a steeper pace. Meanwhile, imports of goods and services dropped even more sharply in the fourth quarter (Q4: -2.1% quarter-on-quarter; Q3: +1.2% qoq) with a contraction in imports of both goods and services.
Taking into account recently released data for the final quarter of 2018, the Dutch economy grew 2.5% last year over 2017—when the economy expanded 2.9%—on the back of domestic demand as the positive contribution from the external sector moderated.
Looking ahead, the economy is expected to continue growing at a robust, albeit more moderate, pace. Economic growth should benefit from a tight labor market supporting wage growth and private consumption, while the government is set to pursue a mildly expansionary fiscal budget. Nonetheless, downside risks remain present on the external side with the possibility of a flare-up in the trade spat between the U.S. and China following the end of the truce in early March; a disorderly or hard Brexit; trade tensions between the EU and the U.S; and a prolonged Italian recession. Even so, Klok added that “the fourth quarter figure confirms our expectation that the Dutch economy will be able to grow faster than the eurozone average.”
Netherlands GDP Forecast
Met the why particular Consensus Forecast panelists see GDP growing at a softer pace of 2.0% in 2019, which is down 0.1 percentage points from last month’s projection. For 2020, the panel expects the economy to expand 1.7%.
Netherlands - Consumption Data
|Consumption (annual variation in %)||-1.0||0.3||2.0||1.6||1.9|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.21||5.70 %||Feb 20|
|Exchange Rate||1.13||0.65 %||Feb 21|
|Stock Market||541||-0.57 %||Feb 21|
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Netherlands: Consumer confidence falls into pessimistic territory for the first time since February 2015
February 20, 2019
Sentiment among Dutch consumers continued to drop and stumbled into pessimistic territory in February with the index decreasing to minus 2 from plus 1 in January.
February 14, 2019
In defiance of the general European trend of moderating economic growth, the Dutch economy shifted into a significantly higher gear in the fourth quarter.
February 1, 2019
Momentum in the Dutch manufacturing sector softened at the start of the new year as the manufacturing Purchasing Managers’ Index (PMI) produced by NEVI and IHS Markit dropped to 55.1 in January from 57.2 in December.
January 30, 2019
Sentiment among Dutch producers moderated markedly from 7.5 in December to 5.8 in January, chiefly on the back of less optimism regarding expected business activity.
January 22, 2019
The new year started on a sour note, with consumer confidence freefalling from 9 in December to 1 in January.