Fact Book: The Netherlands‏

News from Danske Research

This Fact Book on the Netherlands gives a brief overview of the main aspects of the Dutch economy. It includes many informative charts and tables.

The next Fact Book to be published is on Belgium. The idea is that these Fact Books can be used as a quick reference point for key ratios, etc.

The Netherlands is a small open economy and the export share represents more than two-thirds of GDP. GDP depends heavily on world demand and its business cycle follows the business cycles in important export markets, especially countries within the European Union. The Netherlands has a high surplus on the current account.

The Netherlands is the seventh most competitive economy in the world according to the World Economic Forum’s Index of the most competitive economies in the world. This is due to a highly skilled labour force, innovative business, and efficient, competitive markets. In addition, growth in labour productivity has been high during the 2000s compared with other euro countries. Although labour productivity fell during 2011, there are small signs of improvementin 2012.

GDP grew more than the euro area on average before the financial crisis but the Netherlands experienced a sharp decrease in GDP during the financial crisis because of the decline in world demand. The speed of the recovery will largely depend on the worldeconomic outlook. The unemployment rate remains among the lowest in the euro area.

The government budget was balanced before the crisis but, similar to other European countries, the budget deficit increased to above the 3% rule in the years after the crisis due to bank bailouts and expansive fiscal policy. During the spring it became clear that the budget deficit would deteriorate further in the coming years and it was clear that additional austerity measures were needed. The government collapsed on this issue, but five parties eventually agreed to cut the deficit to 2.7% of GDP by next year. Thegovernment debt is currently around 70% of GDP – substantially below the euro areaaverage.

The housing bubble burst in 2008 and existing home sales fell dramatically and are still below the 2000 level. House prices are still falling. Household loans represent about 130% of GDP, partly due to high pension savings.

The general election was held in September 2012. The conservative VVD became the biggest party followed by the social democratic PvdA. On 29 October 2012, it was announced that the two parties had agreed to form a unity government.

To Read the Entire Report Please Click on the pdf File Below.