Netherlands: Economic growth in the Netherlands maintains momentum due to private consumption
November 15, 2016
In the third quarter of 2016, economic activity in the Netherlands maintained the pace of growth observed in the second quarter, on the back of stronger private consumption. Conversely, both fixed investment and government consumption weakened compared to Q2. GDP grew 0.7% in seasonally-adjusted terms over the previous quarter, according to preliminary data released by Statistics Netherlands on 15 November. The reading mirrored Q2’s revised print (previously reported: +0.6% quarter-on-quarter seasonally-adjusted), marking the tenth consecutive quarter of growth.
In Q3, private growth accelerated from the 0.2% recorded in Q2 to a 0.7% increase, marking an almost two-year high. On the contrary, fixed investment slowed from the 1.9% growth recorded in the second quarter to an over two-year low of 0.5%. Moreover, government consumption lost steam, swinging from the 0.6% expansion in Q2 to a 0.1% decline in Q3.
On the external front, growth in exports of goods and services accelerated, recording a 1.2% expansion, up from the 0.2% growth observed in Q2, marking the highest reading in five quarters. Imports of goods and services accelerated from Q2’s 0.1% expansion to a 1.1% growth in Q3. Consequently, the external sector’s net contribution to overall economic growth in Q3 was 0.2 percentage points, up from Q2’s 0.1 percentage points. More detailed data will be released on 23 December.
The economy grew 2.4% in Q3 over the same quarter last year, which represented a slight acceleration compared to Q2’s 2.3% expansion.
Commenting on the release, Dimitry Fleming, Senior Economist at ING, adds:
“The details of the 3Q report show that consumers have now fully joined the recovery. Private consumption (+0.7%) provided the largest contribution to growth. The increase in spending is driven by strong increases in purchasing power, which in turn is fueled by tax cuts, falling consumer prices and employment growth.”