After falling sharply in 2012 and 2013, household spending has now grown for three consecutive quarters. This turnaround reflects the recovery in consumer confidence as conditions in both the labour and housing markets have improved, albeit from very weak starting points in both cases.Dutch consumers have finally started to open their wallets, prompting hopes of a consumer-led economic revival. But even if renewed falls in household spending look unlikely, the combination of the feeble labour and housing market recoveries, households’ heavy debt burden and fiscal austerity suggest consumption will be too weak for the overall economic recovery to gain much momentum. “We expect GDP growth of around 1.5% this year and 1.0% in 2016, broadly in line with the euro-zone average. As such, economic growth will be too slow to help the euro-zone’s peripheral countries or to allow a Dutch fiscal stimulus that would have positive effects across the region.” – says Capital Economics
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