Dutch Economy in Focus – Growth slowing sharply

Dutch economic growth continues to slow – to 0.9% in 2020, slightly lower than we previously thought. The recent escalation of the US-China trade war prompted a further, slight reduction in our global growth outlook. The trade conflict is mainly hitting exports and investment. This year, however, growth will decelerate less than we thought – mainly because GDP grew more than foreseen in the second quarter. Despite the expected meagre growth in the second half, GDP can increase 1.6% this year (old estimate was 1.3%). Private consumption will rise much less than in 2018, mainly because of flatter growth in disposable income, but also due to flagging consumer confidence. Unemployment initially fell a bit more this year, but is creeping up again. Meanwhile, jobs growth has decreased slightly. The slowing economy will further dampen jobs growth and push unemployment higher – notably next year. Due to the strong growth deceleration and extra public spending, the government surplus will contract sharply – to ¼% of GDP in 2020.