Outlook Netherlands 2020 – Growth under pressure

Dutch economic growth set to slow in 2020 to 0.9%.Our growth forecast for 2019 has been raised slightly to 1.7% due to the stronger-than-expected GDP figure for Q3.Normally, we could have upped our 2020 forecast for the same reason. But with the nitrogen crisis weighing on growth, our forecast is actually slightly lower than previously expected.The deceleration is reflected in stalling export growth and contracting investment.Household consumption, by contrast, can rise more than in 2019 on the strength of tax cuts and larger real wage growth. Government consumption can also accelerate more as the coalition has not yet managed to achieve all its spending plans.The meagre 0.9% conceals a probable pick-up in the economy in the course of 2020 on the back of reviving world trade.Unemployment is already gradually edging higher and will continue to do so in 2020 as the economic slowdown hits jobs growth.Inflation will fall again in 2020 thanks to the VAT increase at the start of 2019 dropping out of the calculation. Another factor is the reduction in energy tax for households.