Netherlands: Economy grows at a modest pace in Q3
December 22, 2017
A second GDP release for the third quarter confirmed the preliminary estimate: The Dutch economy grew a modest 0.4% in seasonally-adjusted quarter-on-quarter terms, a marked slowdown from the previous quarter’s stellar performance (Q2: +1.5% quarter-on-quarter seasonally-adjusted). Data released by the Central Bureau of Statistics (CBS) on 22 December showed that growth was broad-based, as private consumption, fixed investment and exports grew at a robust pace. While private consumption and exports grew more moderately than in the prior quarter, fixed investment growth accelerated. Moreover, the economy has been expanding for 14 consecutive quarters.
Private consumption growth slowed from the second quarter but remained solid nonetheless; it was likely supported by gains in employment, as 48,000 jobs were added in the third quarter. Private consumption increased 0.6% over the previous quarter, below Q2’s 0.9% increase. Fixed investment growth, on the other hand, picked up steam from 1.0% in the previous quarter to 2.4%. The acceleration was driven by government investment (Q3: +16.9% qoq; Q2: -1.1% qoq). Private fixed investment contracted, however, in the third quarter (Q3: -0.4% qoq; Q2: +1.4% qoq).
On the external front, export growth inched down from a 2.0% quarter-on-quarter increase in Q2 to 1.9% in Q3. The result was chiefly driven by stronger export growth of services, as the pace of expansion of goods moderated somewhat. Meanwhile, import growth picked up from 1.4% in Q2 to 2.1% in Q3.
A year-on-year comparison confirmed that the economy grew 3.0% in the quarter, slowing slightly from the previous quarter’s 3.3% annual increase.
The economy is expected to have closed 2017 on a strong note, likely posting its fastest rate of expansion for the year in a decade. Going forward, the government’s fiscal stimulus plans are expected to bode well for private consumption and keep the economy’s growth rate afloat. However, it is likely that the pace of expansion will moderate from 2017’s strong performance.
Netherlands GDP Forecast
FocusEconomics Consensus Forecast panelists see GDP growing 2.4% in 2018, which is up 0.2 percentage points from last month’s projection. For 2019, the panel expects economic growth to moderate to 2.0%.
Author: Jan Lammersen, Economist