Netherlands: Consumer sentiment improves in April, remains deeply pessimistic
Consumer sentiment rose to minus 37.0 in April from minus 39.0 in March. April’s result marked the best reading since February 2022. That said, the index remained entrenched below the 0-threshold, indicating pessimism among consumers.
The improvement was broad-based for all the subcomponents of the index. Consumers were less pessimistic about their financial situations in the past 12 months and the next 12 months, and regarding their willingness to make large purchases. That said, their levels of pessimism about the economy in the past 12 months and in the next 12 months were almost unchanged.
Generous fiscal support, rising wages and lower inflation have contributed to the recent improvement in consumer sentiment and are likely to continue to do so in the coming quarters. Meanwhile, high levels of private debt, in conjunction with higher interest rates from the European Central Bank, will be weighing on private consumption. The housing market is a key factor to watch. On the one hand, the recent moderation in home prices bodes well for housing affordability, benefitting consumers. On the other hand, this dynamic could lower households’ net wealth.