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CPB | Economic Policy Analysis
March 13, 2013

Dutch economic growth weak, due to lagging consumption levels

The contracting economy in the Netherlands in 2013 largely will be the result of lagging domestic consumption levels. The fragile growth projected for 2014 almost entirely will be due to the recovering world trade. These are some of the conclusions by CPB, in their Central Economic Plan (CEP) 2013, presented by CPB Director Coen Teulings.

The download is an English translation of chapter 1 of the Dutch publication.

The CEP’s main data were published two weeks ago and have not changed since. CPB projects a budget deficit of 3.3% for 2013 and 3.4% for 2014. Despite a slight recovery later this year, GDP volume is projected to decline in 2013 by ½%. For 2014, an economic growth of 1% is projected. Unemployment in 2013 will increase by 90,000 people to a total of 560,000 and in 2014 to 575,000.

Private consumption levels are expected to decline in 2013 by 1½% due to lower wage and benefit incomes and lower house prices. Real house prices have declined by 23% since 2008, and even when lower incomes and house prices are taken into account, the growth in consumption has been lagging behind since 2009. One of the possible explanations for this fact is that, since 2008, Dutch consumer confidence has declined strongly. For 2014, consumption levels are projected to increase slightly (1/4%) because of a small improvement in disposable income.

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