Netherlands: Economy steps up pace in Q4, records strongest full-year growth in a decade
February 14, 2018
According to the first estimate of GDP for the final quarter of 2017, released by Statistics Netherlands (CBS) on 14 February, the pace of growth picked up steam to 0.8% quarter-on-quarter (Q3: +0.4% quarter-on-quarter). It was chiefly driven by a strong external sector.
Private consumption contracted 0.3% quarter-on-quarter in the fourth quarter (Q3: +0.4% qoq) despite unemployment dropping to multi-year lows. Government consumption, however, jumped from a flat reading in Q3 to 0.5% qoq growth in Q4. Fixed investment growth, meanwhile, was flat. The external sector also showed a somewhat mixed picture; exports of goods remained robust (Q4: +1.6% qoq; Q3: +1.8% qoq) but exports of services fell in quarter-on-quarter terms from a 1.6% expansion to a 1.8% contraction in Q4. Import growth moderated significantly from the prior quarter (Q4: +0.1% qoq: Q3: +1.8% qoq).
A year-on-year comparison for the quarter showed that growth came in at 2.9%, marginally below the prior quarter’s 3.0% annual growth rate and the lowest quarterly year-on-year figure of the year. This was mainly due to more moderate growth rates for exports (Q4: +5.5% year-on-year; Q3: +6.4% yoy) and fixed investment (Q4: +6.4% yoy; Q3: +7.0% yoy). Meanwhile, private consumption nosedived in the final quarter of the year (Q4: +0.9% yoy: Q3: 2.4% yoy).
The full-year growth figure came in at 3.1% and marked the quickest pace of expansion in 10 years. In 2017 growth was broad-based as fixed investment, exports and private consumption all increased. Fixed investment grew 6.0%, buoyed by increased investment in residential property as the housing market continues to heat up. The external sector’s 5.5% growth came on the back of strong demand for machinery and appliances, while growth in re-exports also increased at a strong rate. Household spending expanded 1.8% as consumers spent more money on electrical appliances, clothing and home furnishing, while demand for passenger cars eased.
More complete details will be released on 26 March.
Dutch GDP Forecast
The government expects the economy to grow 3.1% in 2018 and 1.9% in 2019. FocusEconomics Consensus Forecast panelists, however, see GDP growing 2.5%, which is up 0.1 percentage points from last month’s projection. For 2019, the panel expects the economy to expand 2.1%.
Author: Jan Lammersen, Economist