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The Netherlands: higher economic growth first quarter 2015

Economic Update

  • GDP growth for 15Q1 upwardly adjusted from 0.4% to 0.6%
  • Positive developments manufacturing production
  • Consumer confidence at highest level since 2007
  • Negative economic effects of a Grexit on the Dutch economy more likely

In its second estimate, Statistics Netherlands (CBS) has upwardly adjusted economic growth for the first quarter of 2015, from 0.4% to 0.6%. The higher growth estimate was mainly caused by an upward adjustment of growth in private consumption, business investment and exports. In addition, exports in the previous quarters have been upwardly adjusted as well.

The upwardly adjusted growth is positive for the growth expectation for 2015. However, there are also recent developments which will negatively affect growth. The Minister of Economic Affairs, Henk Kamp, has decided to reduce the gas extraction from the Groningen field, which is why gas production from that field will in 2015 will be a maximum 30 billion cubic meters instead of 39 billion. This reduces economic growth and negatively affects the government budget. Another factor which could negatively affect growth is the increasing likelihood of a Grexit.

Positive development manufacturing production

Dutch manufacturing production increased by 2% m-o-m in April 2015 (seasonally adjusted). Momentum (3m/3m change) was also positive in April (0.8%). With sentiment indicators becoming increasingly positive, the outlook for the manufacturing sector is good. The Dutch PMI has increased strongly since the beginning of this year, and rose further in June to 56.2 (figure 1). Producer confidence went up as well in June. Both sentiment indicators point towards relatively strong manufacturing production growth in the coming months.

Dutch exports saw a strong increase of 3.3% m-o-m in April. However, because of weak export developments in the previous months, momentum was slightly negative. Due to the depreciated euro against the US dollar and British pound sterling, as well as good growth prospects in important Dutch trading partners, we expect exports to pick up further in the coming months.

Figure 1: Improved confidence in manufacturing production
Figure 1: Improved confidence in manufacturing productionSource: Markit, Statistics Netherlands (CBS)
Figure 2: Strong year-on-year increase of exports
Figure 2: Strong year-on-year increase of exportsBron: Statistics Netherlands(CBS)

Consumer confidence reaches highest level in eight years

Over the last few months household consumption developments have been weak. In April, consumption declined with 0.1% month-on-month. Because of this, momentum declined for the third month in a row (figure 3). Consumption did increase strongly compared to a year before, driven by higher consumption growth of durable goods and energy.

The outlook for consumption is positive. Due to improving labour market conditions and low inflation, real disposable income will grow relatively quickly this year. The increasing consumer confidence is an additional positive factor for consumption. Consumer confidence increased further in June and is now at its highest point since 2007 (figure 4). Both the opinion of Dutch household on the economic climate as well as the willingness to buy increased. However, since then the uncertainty regarding Greece has markedly increased.

Figure 3: Weak consumption developments
Figure 3: weak consumption developmentsSource: Statistics Netherlands (CBS)
Figure 4: Highest level consumer confidence since 2007
Figure 4: Highest level consumer confidence since 2007Source: Statistics Netherlands (CBS)

Negative effects of a Grexit on Dutch economy more likely

Now that the prospect of a Grexit seems more and more likely, the relevant question is to what extent this could hurt the Dutch economy. The direct effects through exports will be limited. Only 0.5% of the value of Dutch total exports of goods goes to Greece, while the share of Greek imports is only 0.1%.

Although the direct effects seem limited, there are indirect consequences of a Grexit which could damage the Dutch economy. The most likely channel through which the Greek unrest could hurt the Dutch economy is through reduced confidence. The uncertainties which go hand in hand with a possible Grexit could lead to a drop in consumer confidence and producer confidence, which could reduce the consumption of households and investments of firms. These effects will also affect our European trading partners, reducing their economic growth. This will providing a negative effect on Dutch export growth.

Table 1: Key Data, The Netherlands
Table 1: Economic forecast the NetherlandsSource: Rabobank, Statistics Netherlands (CBS)

The Dutch financial sector has only limited exposure to Greece. However, the Dutch government does have a large amount of loans outstanding in Greece, through the participation in various support packages. In the case of a complete Greek default, the total direct losses for the government will be around sixteen billion euros (Bruinshoofd et al., 2015), or 2.4% of GDP. However, the losses will not be attributed to the budget deficit but will directly increase government debt. The risk of addition budget cuts is therefore limited.


Bruinshoofd, A., de Groot, E. en Weernink, M. (2015). Statusupdate ‘dossier Griekenland’. Rabobank Special.

Martijn Badir
RaboResearch Netherlands Rabobank KEO
+31 88 726 7864

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