Macroeconomic developments in the Netherlands · Macroeconomic developments in the Netherlands Investment briefing: The ... Content presentation •The Dutch economic development

CPB Netherlands Bureau for Economic Policy Analysis

Macroeconomic developments in the Netherlands

Investment briefing: The Dutch residential market

Dutch embassy in London

Wim Suyker

22 January 2014


Content presentation

• The Dutch economic development since early 2008 in European perspective

• The most recent Dutch developments

• The short-term outlook

• Structural characteristics of the Dutch economy


Netherlands lagging euro area in 2012 & 2013

94

95

96

97

98

99

100

101

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

GDP volume (2008Q1=100)

Euro area (17 countries) Netherlands


Netherlands lagging its peers from 2011 onwards

94

95

96

97

98

99

100

101

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

GDP volume (2008Q1=100)

Euro area "north" Netherlands

• “north”: Belgium, France, Germany, Netherlands, Austria, Finland


Showing up in unemployment

0

1

2

3

4

5

6

7

8

9

2008 2009 2010 2011 2012 2013

Unemployment rate



Lagging behind not due to exports ....

84

89

94

99

104

109

114

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

Exports of goods and services volume (2008Q1=100)



... but due to investments and ....

74

79

84

89

94

99

104

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

Gross fixed capital formation volume (2008Q1=100)



.... and private consumption

92

94

96

98

100

102

104

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

Private consumption volume (2008Q1=100)



Rise government consumption less than elsewhere

98

100

102

104

106

108

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1

Government consumption (2008Q1=100)



Causes of the relative weak Dutch development?

1. Housing market?

2. Pension fund?

3. Fiscal policy?

4. Mood of consumers and producers?


4. Mood of consumers and producers

• No major difference. Moreover hard to say whether pessimism caused weak development or weak development caused pessimism.

60

70

80

90

100

110

2008 2009 2010 2011 2012 2013

Economic sentiment (January 2008=100)



3. Fiscal policy: consolidation measures

• Fiscal policy has been clearly restrictive in the Netherlands.

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2011 2012 2013 2014 2015 2016 2017

% GDP, not cumulative

Other Rutte I Spring 2012 deal Rutte II 6 bn package (incl. Autumn 2013 deal)


3. Fiscal policy

• Netherlands was not the only country with austerity. International comparison is tough. Structural budget balance is a problematic indicator (big differences between Commission, OECD and IMF indicator). Indicator of Commission: average austerity in the Netherlands

-5

-4

-3

-2

-1

0

2009 2010 2011 2012 2013 2014 2015

Structural budget balance, % GDP



2. Pension funds

• Pension funds bigger in the Netherlands. There are no international comparable data on pension premiums and pensions received. Pension premiums have been a drag on growth in the Netherlands.

14,0

14,5

15,0

15,5

16,0

2009 2010 2011 2012 2013 Pension premium, % of gross wage


2. Pension funds

• Pension funds bigger in the Netherlands. There are no international comparable data on pension premiums and pensions received. Pension payments have clearly been a drag on growth in NL.

-6

-4

-2

0

2

2009 2010 2011 2012 2013

Real disposable income, % change

Retired couple with small 2nd-pillar pension


1. Housing market

• Strong drop in Dutch house prices has had a negative impact on private consumption through wealth effects.

80

85

90

95

100

105

2008 2009 2010 2011 2012 2013

House price index (2008=100)



1. Housing market

70

75

80

85

90

95

100

105

110

2008 2009 2010 2011 2012 2013

Construction production (2008=100)











• The most recent Dutch developments: on its way up




Recession has ended 2013 Q1

-1,5

-1,0

-0,5

0,0

0,5

1,0

2011Q1 2012Q1 2013Q1

Netherlands GDP volume growth (q/q)

Netherlands GDP volume growth (q/q)

2013Q3


Unemployment no longer rising steeply

4,0

4,5

5,0

5,5

6,0

6,5

7,0

7,5

2011 2012 2013

Unemployment rate

Netherlands


Housing market is bottoming out

40

60

80

100

120

1995 1998 2001 2004 2007 2010 2013

Existing home sales (2007=100; s.a)

Existing home sales (2007=100; s.a)

-4

-3

-2

-1

0

1

2

2008 2009 2010 2011 2012 2013

House prices (3m/3m %)

House prices (3m/3m %)


Consumer sentiment up

-35

-30

-25

-20

-15

-10

-5

0

2013M01 2013M04 2013M07 2013M10

Netherlands Consumer confidence indicator

Netherlands Consumer confidence indicator


Purchasing managers index very strong

40 50 60

France

Spain

Italy

Ireland

Austria

Germany

Netherlands

UK

PMI manufacturing December 2013


After 4 years drop, a purchasing power rise in 2014

-3 -2,5

-2 -1,5

-1 -0,5

0 0,5

1 1,5

2

2009 2010 2011 2012 2013 2014

Purchasing power (all households, median, %)











• The short-term outlook: slow growth out of recession



Outlook: slow growth out of recession

-1,2 -1

0,5

2012 2013 2014

GDP

5,3 6,8 7,5 2012 2013 2014

Unemployment rate

2,8 2,5

1,3

2012 2013 2014

Consumer prices (hicp, %)

-4,1 -3,1 -3,3

2012 2013 2014

Government budget balance …












• Structural characteristics of the Dutch economy: strong


Strong economy but long balance sheets households ...

0

50

100

150

200

250

300

350

Netherlands Euro area "north" United Kingdom

Financial assets households, Percentage of GDP, 2012

Financial liabilities households, Percentage of GDP, 2012


... and vulnerable due to big banking sector ...

0

100

200

300

400

500

600

Netherlands Euro area "north" UK

Size banking sector (%GDP, 2011)

Size banking sector (%GDP, 2011)


... and with a puzzling current account balance

-4

-2

0

2

4

6

8

10


Current account balance Percent of GDP , 2013


Strong competitive position

0

2

4

6

8

10

12

14


Global competitiveness index 2013 ranking

Global competitiveness index 2013 ranking


Strong institutions and good infrastructure

0

5

10

15

20

25


Institutions, 2013, ranking

0

1

2

3

4

5

6

7

8

9


Infrastructure, 2013, ranking


Efficient market and education, highly innovative

0

2

4

6

8

10

12

14


Efficiency, 2013, ranking

0

2

4

6

8

10

12


Innovation, 2013, ranking


As a result: High productivity

35

36

37

38

39

40

41

42


Gross domestic product based on purchasing-power-parity (PPP) per capita GDP ,1000 $, 2013


Thank you

• For more information see www.cpb.nl

• Sources used: – Eurostat (GDP, unemployment,

house price, financial assets and liabilities, construction production)

– ECFIN (economic sentiment, consumer confidence)

– Ameco (structural budget balance)

– Markit (PMI)

– IMF WEO (GDP per capita)

– CPB (forecast December 2013; Dutch consolidation measures).

– GCI Global Competitiveness Report 2013-2014.

http://www.cpb.nl/

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Macroeconomic developments in the Netherlands · Macroeconomic developments in the Netherlands Investment briefing: The ... Content presentation •The Dutch economic development