Netherlands Country Risk Report Q3 2018
An already low unemployment rate, a declining labour force, record reliance on external demand, and no more room for monetary stimu-lus, all suggest that the Netherlands' economy will slow sharply next year. Real GDP growth looks set to come in at an impressive 3.2% in 2017, but we maintain our forecast for the economy to grow by a much-more sustainable 2.4% in 2018, and for growth to average 1.4% over the next decade.
Mark Rutte was able to form his third government in October 2017, a record of 208 days after the election on March 15. The new government took the reins after a swearing in session with King Willem-Alexander on November 26. The new four party coalition has the slenderest possible majority, holding 76 of the 150 seats in the lower house of parliament, which is likely to make policy formation problematic. We have downwardly revised the Netherlands' Short-Term Political Risk Index, although the country continues to score strongly from a global perspective.
Executive Summary Core Views Key Risks Chapter 1: Economic Outlook SWOT Analysis BMI Economic Risk Index Economic Growth Outlook Above Trend Expansion Will Cool GDP By Expenditure Outlook Private Consumption To Outperform As Savings Rate Declines TABLE: GDP GROWTH FORECASTS TABLE: PRIVATE CONSUMPTION FORECASTS TABLE: GOVERNMENT CONSUMPTION FORECASTS TABLE: FIXED INVESTMENT FORECASTS TABLE: NET EXPORTS FORECASTS Outlook On External Position Strong External Accounts Here To Stay TABLE: CURRENT ACCOUNT BALANCE FORECASTS Monetary Policy ECB Plays Waiting GameStructural Fiscal Position Fiscal Balance Masks Underlying Weaknesses TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES TABLE: FISCAL AND PUBLIC DEBT FORECASTS Currency Forecast EUR: Near-Term Strength To Give Way Gradually TABLE: BMI EUROZONE CURRENCY FORECAST Chapter 2: 10-Year Forecast The Dutch Economy To 2027 Increasingly Reliant On Productivity Driven Growth TABLE: LONG-TERM MACROECONOMIC FORECASTS Chapter 3: Political Outlook SWOT Analysis BMI Political Risk Index Domestic PoliticsPopulist Forces Remain A Significant Political Risk Foreign Policy Social Democratic Party Decline: Short-Term Blip Or A Change In Politics? Chapter 4: BMI Global Macro Outlook Key Divergences Emerging In World Economy TABLE: GLOBAL MACROECONOMIC FORECASTS TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y TABLE: NETHERLANDS – MACROECONOMIC DATA AND FORECASTS