Euro Challenge November 2017 The

An overview of the Dutch economy The global financial and economic crisis had a deep impact on the Dutch economy due to its trade and financial linkages. Now out of the recession the country is experiencing growth again but faces long-term challenges. The Netherlands was one of the well as changes to the pension founding member states of the system. Despite the sever European Union. The Netherlands economic crisis, the Netherlands adopted the , on January 1st, has recovered substantially with 1999. Euro notes and coins were growth above 2% since 2015 and introduced on January 1st, 2002, a continuously declining replacing the Dutch . unemployment rate since 2014. With declining unemployment, The Netherlands is an export- Did you know…? wages are forecast to increase oriented economy and is known with inflation, resulting in for its stable industrial relations, Geography The Netherlands decreases in cost low unemployment rate, and a is the most densely populated competitiveness. sizable current account surplus. state in Europe. About 20% of Exports benefited greatly from its geographic area is below A new fiscal stimulus package is increased demand in the euro sea level. anticipated to help propel the area and improved price History In the era referred to economy to further growth. competitiveness. Dutch economic as the Dutch Golden Age, Despite the cost of the competitiveness has been helped colonies and trading posts expansion, the government is by improvements in the were established all over the expected to remain in a surplus macroeconomic and business globe. The Dutch East India and general government debt environment, along with Company was the world's should remain below 60%. technological innovation. Private largest commercial enterprise Household consumption and consumption increased as a result in the 17th century. investment are expected to take of higher real wages and the lead on growth figures. employment gains. In late 1636 and Despite strong exports, imports

early 1637, a mania for tulip are strengthening from increased As one of the most open bulbs swept through the domestic demand. This is economies in Europe, the Netherlands. Before the dampening the effect of net Netherlands is particularly market crashed, a single bulb exports and making it potentially vulnerable to developments in the fetched the equivalent of 10 negative. global economy. As such, it could years' salary for the average Dutch worker. not escape unscathed the global crisis that began in 2008. Culture Famous Dutch Economic activity experienced a painters include Pieter Bruegel, severe contraction of 3½% in Rembrandt van Rijn, 2009, climbed back to positive Johannes Vermeer and growth the following year, but then Vincent van Gogh. fell back into recession. The Dutch Fun Fact In the Netherlands, government’s public finances TV shows and movies for deteriorated sharply, from a adults are subtitled, helping surplus in 2008 to a deficit in 2010. with foreign language The parliament passed the Spring acquisition. Only programs for Accords in May 2012, introducing children are dubbed into the major reforms in the labor and . housing markets, as Euro Challenge 2017

Exports The Netherlands The Netherlands’ Economy – Key Facts remains a very open economy

– exports account for 82.4% of • In 2016, the Netherlands had the 6th highest GDP per capita among GDP and the country is the EU member states. It has a population of about 17 million anticipated to have a current inhabitants. account surplus of 9.1% in 2017. • The new coalition government announced an expansionary fiscal policy for 2018-2021. This entails plans for government Wages In recent years, wage consumption and public investment increases. By targeting social growth was minimal. However, affairs, defence, and education, the plan should increase domestic the tightening labor market demand and help lead to greater GDP growth. and robust employment rates are putting upward pressure • The World Economic Forum (WEF) Global Competitiveness Report on wages. Combined with the for 2017/2018 ranked the Netherlands 4th out of 137 countries in labor market strength, trade terms of competitiveness. The country’s companies are skilled in unions are starting to absorbing new technologies (ranked highly for their technological campaign for higher wages, readiness). Business activity is buttressed by a good educational with demands higher than in system. past years.

Labor market The labor • The World Bank’s Doing Business Report for 2018 ranked the market is incredibly strong and nd Netherlands 32 out of 190 counties. Getting credit has improved reaching record levels of but remains a major downside on the Netherlands' ranking. growth, with unemployment forecasted at 4.8% in 2017 • According to the European Commission’s Autumn 2017 forecast, and 3.5% by 2019 and GDP will grow by 3.2% in 2017 and 2.5% in 2019. Inflation is employment growth around forecast to strengthen from 1.3% in 2017 to 2.2% in 2019. The 2% in 2017-2019. 2019 increases are expected to be from planned increases in indirect taxes, such as VAT and energy taxes. Debt The government debt-to- GDP ratio is expected to fall References below 60% at 57.7% in 2017 • https://www.gfmag.com/global-data/country-data/the-netherlands-gdp- and see further decline to country-report 51.5% in 2019. Furthermore a • http://ec.europa.eu/economy_finance/eu/countries/netherlands_en.htm surplus is expected to continue from 2016 through • http://europa.eu/abc/european_countries/eu_members/netherlands/ 2019, with 0.7% in 2017 and • www.oecd.org/netherlands 0.9% in 2019. • http://www.imf.org/external/country/NLD • http://www.doingbusiness.org/ExploreEconomies/?economyid=137 Trade The Port of Rotterdam is one of the most important • https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html transport centers in the world • http://reports.weforum.org/global-competitiveness-report-2015- and the largest port in Europe. 2016/competitiveness-rankings/