EU Spring Forecast: Dutch economic recovery gains ground
Edited by Joseph Dailey.
On the basis of approximately 180 indicators such as GDP, inflation, employment and public finances, the European Commission has forecasted economic growth in the European Union, the euro area and its major trading partners. The forecasts are the basis for economic monitoring procedures during the European Semester.
The aforementioned forecasts are based on a series of external assumptions regarding exchange rates, interest rates and commodity prices. The figures given are as predicted at the time of the forecast. This forecast also takes into account additional relevant data and factors, including assumptions about government policies which became available on April 21, 2015.
Netherlands: Economy grows strongly
The Dutch economy grew strongly in the fourth quarter of 2014, driven by domestic demand and the recovery of investment. Based on early indicators, we can expect domestic demand to increase further in 2015 and the export sector to benefit from the depreciation of the euro. It is also expected that inflation will reach its lowest point this year before once again rising over the predicted level of 1% next year. Estimates put the overall deficit at 1.7% in 2015 and 1.2% in 2016.
You can find the complete forecast for the Netherlands at: http://ec.europa.eu/economy_finance/eu/forecasts/2015_spring/nl_en.pdf
General forecast
The economy in the European Union will benefit this year from a favorable economic tailwind. According to economic forecasts, in 2015 the European Commission will have a slight upturn in the EU through these temporary factors.
In regards to monetary policy, quantitative easing from the ECB has had a clear effect on the financial markets, leading the expansion to lower interest rates and result in expected improvement in credit conditions. With the EU more or less balancing a neutral fiscal stance – there is no question of tightening or easing – fiscal policy can be expected to promote growth. Over time, structural reform and investments in Europe should also pay off.
As a result, it is currently assumed that the real GDP will grow by 1.8% in the EU and 1.5% in the eurozone in 2015. This is respectively 0.1% and 0.2% more than anticipated three months ago. For 2016 the Commission expects a growth of 2.1% for the EU and 1.9% for the eurozone. Domestic demand will contribute the most to this GDP growth.
