Dutch economy stays strong on domestic demand and exports

THE HAGUE: Economic growth in the Netherlands unexpectedly held steady in the second quarter at 0.5 percent on a quarterly basis, helped by strong investments, consumer spending and exports, the Dutch national statistics office (CBS) said yesterday.

The Dutch economy has outperformed euro zone peers in the past two years, as unemployment fell to record lows and consumers
increased their spending. In the second quarter it managed to stay strong despite a worrying 0.1 percent contraction of the German economy, its main trading partner.

“We have done very well in comparison to our neighbouring countries, mainly because of strong domestic demand,” CBS chief economist Peter Hein van Mulligen said.

Growth in the euro zone’s fifth largest economy was as strong as in the previous two quarters, topping the 0.3 percent rate predicted by economists in a Reuters poll. A historically tight labour market and rising wages led to a 2 percent rise in consumer spending, while companies invested 5 percent more than in the second quarter of 2018. German weakness did hurt demand for the Dutch industry,
but overall export growth accelerated to 3 percent in the quarter, as the Dutch sold more machines, chemicals and services abroad.

The government’s economic advisory board is set to update its outlook for the Dutch economy today, after in June forecasting growth of 1.5 percent for this year and next. Growth was 2.6 percent in 2018. – Reuters