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Netherlands Country Risk Report Q4 2018

Netherlands Country Risk Report Q4 2018

Key View:

An already-low unemployment rate, a declining labour force, record reliance on external demand, and no more room for monetary stimulus, all suggest that the Netherlands' economy will slow sharply over the next years. We maintain our forecast for the economy to grow by 2.4% in 2018, and for growth to average 1.5% 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 revised down the Netherlands' score on our Short-Term Political Risk Index, although the country continues to score strongly from a global perspective.

Key Risks

The largest risk facing the economy comes from its increased reliance on external demand to drive growth, which leaves the country beholden to external fac-tors. Politically, the main risk is a breakdown in the recently formed coalition, potentially resulting in another election.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Dutch Economy Nearing The Peak Of The Cycle
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
Eurozone Inflation Will Struggle To Stay At 2.0% ECB Target
Netherlands Country Risk Q4 2018ContentsFiscal Policy And Public Debt Outlook
Fiscal Balance Masks Underlying Weaknesses
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Gradual Appreciation Amid End Of QE
TABLE: EUROZONE CURRENCY FORECAST
10-Year Forecast
The Netherlands Economy To 2027
Increasingly Reliant On Productivity-Driven Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Amsterdam: An Overlooked Beneficiary Of Brexit
Foreign Policy
The Gradual Emergence Of A 'Two-Tier' EU
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: NETHERLANDS – MACROECONOMIC DATA AND FORECASTS

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