Despite being severely hit by the economic crisis, the Dutch economy saw a remarkable 2.0% growth in 2015, supported by low energy prices, a weak currency and low interest rates. Growth in Netherlands outperformed the eurozone average, rising from 1.0% in 2014 to 2.0% in 2015, compared with 1.5% for the eurozone.
The effect of the low interest rate environment is ambiguous. However, the weakening of the euro in the early part of 2015 may still have some positive effect through 2016. Political risk remains dominant with little scope for a viable coalition government after the next general election in March 2017.
That said, investment is likely to remain quite robust in the first half of 2016, as many investment projects were already decided before the slowdown of the business cycle. Moreover, the autumn investment survey suggests that some of the planned projects for 2015 have been moved to this year. Also, improvement in the labour market and rising wages are likely to keep support household consumption.
“Looking ahead to 2016, we are forecasting growth of 1.8%, which is again ahead of the eurozone forecast. Many of the factors which affected the economy in 2015 will persist in 2016, though with less vigor,” said BNP Paribas in a research note.
The material has been provided by InstaForex Company – www.instaforex.com