Netherlands Economic Outlook
After contracting in quarter-on-quarter terms in Q3 2022, the economy bounced back in Q4. Growth in private consumption and exports accelerated, while fixed investment and public spending rebounded. In Q1 2023, our panelists expect qoq activity to contract slightly. Despite inflation declining in January due to the government’s energy price cap, consumer confidence remained in pessimistic territory in January–February, boding ill for private spending. That said, wage growth accelerated in January as the minimum wage was hiked 10%, boding well for private spending ahead. In other news, as part of a deal with the U.S. and Japan struck in January, the Dutch government will impose new restrictions on the export of microchip technology to China. China is the third-largest market for Dutch company ASML, whose technology plays a key role in the mass production of semiconductors.
Harmonized inflation fell to 8.4% in January (December: 11.0%) due to lower price pressures for housing, clothing and restaurants. This year, inflation should more than halve from 2022 on the back of the energy price cap, a strong base effect and declining commodity prices. The planned permanent shutdown of the Groningen gas field in October is a key factor to watch.