Marcel Klok, Senior Economist at ING, explains that Netherlands GDP growth declined to 0.5% QoQ in the first quarter of 2018, in line with the disappointing 0.4% figure in Eurozone and while this was short of ING’s earlier expectations (0.7% to 0.8% QoQ), growth remained above the average pace in the Eurozone.
Key Quotes
“Leading indicators had already signalled some risks to the downside. In line with leading European indicators, a couple of Dutch survey indicators softened in recent months. While confidence of consumers and commercial services hardly changed, indicators for industry and retail fell, especially purchasing managers in the industry were less optimistic about export orders.”
“Nevertheless, GDP-growth remained solid and domestic demand drove the Dutch economy ahead.”
“Employment is still rising at a high pace: 76K extra jobs were created (+0.7% QoQ) in the first quarter. Also, wage growth at the margin finally started to show signs of acceleration (with recently agreed collective wage agreement showing an average annualised wage growth of 2.6% in April, after 1.7% at the end of 2017), both supporting private consumption going forward.”
“Overall, also given a revised Q4 number, we have revised our GDP growth forecast for 2018 to 2.8%. This is below the 3.2% forecast of the Netherlands Bureau of Economic Policy and may have some consequences for the forecasted budget surplus for the year.”
“However, compared to other European countries this is above the average. Since growth is really home-made, the Dutch economy will certainly feel sunny for the Dutch this year.”
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