Netherlands: Consumer confidence hits highest level since March 2022 but remains pessimistic in February
Consumer confidence rose to minus 44.0 in February from January’s minus 49.0. February’s result marked the strongest reading since March 2022. However, the index remained entrenched below both the 0-threshold and its two-decade average of -10.0, signaling that consumers remained pessimistic.
The reading reflected an improvement in every subcomponent of the index: Consumers became less pessimistic about the economy in the past 12 months and in the next 12 months, their financial situation in the past 12 months and the next 12 months, and with regard to their willingness to make large purchases.
Generous fiscal support, rising wages and lower inflation should support consumer confidence going forward. That said, rising interest rates will weigh on private consumption this year, amplified by the highly leveraged balance sheets of Dutch consumers. Tighter-than-expected monetary policy from the ECB is a key risk.