Netherlands GDP Q1 2016


Dutch economy gains momentum in first quarter on consumption and exports

Dutch economic growth picked up in the first quarter of the year on the back of stronger private consumption and public spending, along with an improvement in the external sector. Conversely, fixed investment weakened compared to Q4. GDP expanded at the fastest pace in a year, increasing 0.5% in seasonally-adjusted terms over the previous quarter, according to more detailed data released by Statistics Netherlands on 24 June. The reading was in line with the preliminary estimate and marked an acceleration over Q4’s 0.2% expansion.

In Q1, private consumption growth accelerated from the flat reading recorded in Q4 to a 0.5% increase, which represented the fastest growth in four quarters. Government consumption rebounded from a 0.5% contraction in Q4 to a 0.3% rise in Q1. Conversely, fixed investment deteriorated, slowing notably from Q4’s 2.9% expansion to 0.8% growth in Q1.

On the external front, growth in exports of goods and services accelerated from a 0.8% expansion in Q4 to a stronger 1.1% rise in Q1. Imports of goods and services dropped from Q4’s 1.1% increase to a smaller 0.8% expansion in Q1. As imports slowed while exports picked up pace, the external sector’s net contribution to overall economic growth rebounded from minus 0.1 percentage points in Q4 to plus 0.4 percentage points in Q1, tallying the largest contribution to GDP growth in nearly two years.

The economy grew 1.5% in Q1 over the same quarter last year, which was a notch up from Q4’s 1.4% expansion.

The government expects GDP to expand 1.8% in 2016 and 2.0% in 2017. For 2016, FocusEconomics Consensus Forecast panelists see GDP growing 1.7%, which is unchanged from last month’s projection. For 2017, the panel expects the economy to expand 1.8%.

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