Netherlands Economic Forecast

Netherlands Economic Outlook

June 26, 2018

A second estimate confirmed that GDP growth softened somewhat in the first quarter of the year, weighed down by a weaker performance in the external sector. Growth remained solid, however, underpinned by robust consumer spending on the back of tightening labor market conditions, moderate inflation and healthy wage gains. According to available data, the economic momentum appears to have carried over into the second quarter. Consumer confidence remained at high levels throughout the quarter, and the unemployment rate rested at a multi-year low in April and May, which bodes well for household spending. Moreover, robust growth in industrial production in April together with elevated business confidence and strongly expansionary conditions in the manufacturing sector in the first two months of the quarter suggest economic activity continued to expand at a solid rate in the second quarter.

Netherlands Economic Growth

Although some deceleration in export growth due to cooling economic conditions in the EU will weigh on the external sector, resilient domestic demand is expected to drive overall growth going forward. Rising wages and low unemployment should support consumer spending, while favorable business conditions and low interest rates will spur fixed investment. That said, uncertainty surrounding both Brexit and the political situation in Italy could lead to some financial instability and higher interest rates, posing downside risks to the outlook. FocusEconomics Consensus Forecasts panelists pencil in 2.7% growth for 2018, which is unchanged from last month’s forecast. Next year, the panel expects the economy to expand 2.2%.

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Netherlands Facts

ValueChangeDate
Bond Yield0.485.70 %Jul 10
Exchange Rate1.170.65 %Jul 11
Stock Market553-0.57 %Jul 11

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