Dutch economy steams ahead - ING

Dimitry Fleming, Senior Economist at ING, notes that the Dutch GDP has continued to fire on all cylinders as in 3Q16, GDP rose 0.7% with both domestic and foreign demand supporting the increase.

Key Quotes

“The last three quarters saw a strong acceleration, with GDP surging 0.7% in each quarter (1Q and 2Q were both revised up from 0.6%).”

“The details of the 3Q report show that consumers have now fully joined the recovery. Private consumption (+0.7%) provided the largest contribution to growth. The increase in spending is driven by strong increases in purchasing power, which in turn is fuelled by tax cuts, falling consumer prices and employment growth. Investment posted another increase, largely on the back of housing. Net exports added 0.2%-point to GDP growth. Export (+1.0%) rose a tad faster than imports (+0.8%).”

“Sector-wise, the main engine of growth was the commercial services sector, while manufacturing posted a small decline in output. The PMI index for the industry indicates a swift return to growth.”

“All and all, today's report supports our positive growth outlook for this year. On the back of today’s report we may have to upgrade our growth forecast to 2%. Next year, when the effects of Brexit are likely to become stronger, the economy is expected to expand less rapidly. Given the strong domestic dynamics, growth of (at least) 1.5% remains on the cards for 2017.”