Dutch Growth to Exceed 3 Percent by Yearend

The Dutch economy is picking up steam on the back of a surge in exports and is expected to post its strongest performance in a decade in 2017, a leading forecaster said on Wednesday.

Statistics Netherlands said growth in the second quarter came in at 1.5%, well ahead of a projected 0.6%, as exports and rising consumer spending led to an “exceptional” expansion, Reuters reported.

The strongest quarterly growth since the last three months of 2007 got a strong boost from an acceleration of export growth, which surged to 11% in June, with strong sales of machinery and chemical products as the main drivers.

Domestic demand also played a large part in the buoyant second quarter growth, with consumers spending more on food and durable goods, such as electrical appliances and furniture.

On the back of this strong performance, leading economic forecaster CPB lifted its outlook for 2017 growth by nearly 1 percentage point to 3.3%, up from the 2.4 it predicted in June. For 2018, it expects growth of 2.5%, up from an earlier forecast of 2%.

Figures show the Netherlands has left the era of austerity since the financial crisis, which brought seven years of no growth.

Recovery has been helped by the zero-rate interest policy of the European Central Bank, which has also pushed down mortgage rates in the Netherlands to historically low levels, driving a surge in the housing market where prices have reached levels not seen since the start of the financial crisis.

The strong economy led to the highest job growth since 2008 in the second quarter and will drive unemployment down to 4.3% in 2018, CPB said, from 6% last year.