December 20, 2017

Forecast December 2017

December projections 2017: economic boom and expansive budget

Press release
Economic growth is projected to continue in 2018. GDP will increase by more than 3%, as it did in 2017. These are the highest growth percentages since 2007. Therefore, by next year, we can speak of an economic boom. All forms of spending will contribute to growth. This is the conclusion by CPB Netherlands Bureau for Economic Policy Analysis in its December projections, published today. Government spending is playing a particular role, here. The government is pursuing a pro-cyclical budgetary policy, which fuels economic growth. In 2017, the increase in government spending was no more than 0.4%, whereas in 2018, it is projected to be 3.5%. This is due to measures under the Coalition Agreement — such as increased spending on education and national defence —  as well as to increasing health care expenditures. Despite this increase in public spending, the government budget will still have a surplus of 0.5%.  
Main image

Table main data

In 2018, employment will see a substantial increase of 2% and, because of the less-rapidly growing labour supply, unemployment will decrease further, down to 3.9% of the labour force — the lowest level since 2007. The tight labour market means companies will pay higher wages, in order to attract and hold on to personnel. The increase in real wages translates into an increase in purchasing power. The jobs increase also leads to a higher disposable income for households.    

This forecast is published in CPB Policy Brief 2017/13 'Decemberraming 2017' (only in Dutch).

Fan Charts December 2017

The figures present fan charts around the December 2017 point forecasts for GDP growth, HICP inflation, unemployment and general government financial balance.

The figures present fan charts around the December 2017 point forecasts for GDP growth, HICP inflation, unemployment and general government financial balance. The solid line represents data realizations (2012-2016) and the December 2017 point forecasts for 2017 and 2018. Around the central path the figures present a fan of confidence intervals:

  • 30% confidence interval from the 35th to 65th percentile, dark blue area
  • 60% confidence interval from the 20th to 80th percentile, dark blue + blue area
  • 90% confidence interval from the 5th to 95th percentile, dark blue + blue + light blue area

The probability is thus 30% that the outcome will fall in the dark blue area and the probability is 10% that the outcome will fall outside the fan. In other words, the fan is a graphical representation of the likelihood of the various outcomes. The solid line represents the most likely outcome and outcomes are more likely when they are closer to the solid line.

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December 20, 2017

Forecast December 2017, figures

Economic growth is projected to continue in 2018. GDP will increase by more than 3%, as it did in 2017. These are the highest growth percentages since 2007. Therefore, by next year, we can speak of an economic boom. All forms of spending will contribute to growth.

Economic growth in the Netherlands, 2008-2018

>This chart depicts the growth of the Dutch economy in the Netherlands from 2008 - 2018.

Table 'Main economic indicators', 2015-2018 (a)

International items
  2015 2016 2017 2018
Relevant world trade volume goods
and services (%)

3.7

3.6

4.5

4.3

Export price competitors (goods and
services, non-commodities, %)

8.0

-5.1

0.3

0.8

Crude oil price (dollar per barrel)

51.9

43.3

53.8

61.7

Exchange rate (dollar per euro)

1.11

1.11

1.13

1.17

Long-term interest rate the
Netherlands (level in %)

0.7

0.3

0.5

0.5


GDP and demand (volume)
  2015 2016 2017 2018
Gross domestic product
(GDP, economic growth, %)

2.3

2.2

3.2

3.1

Consumption households (%)

2.0

1.6

2.2

2.4

Consumption general government (%)

-0.2

1.2

0.8

3.0

Capital formation including
changes in stock (%)

11.2

3.1

5.5

5.5

Exports of goods and services (%)

6.5

4.3

5.7

4.9

Imports of goods and services (%)

8.4

4.1

5.3

5.5


Prices, wages and purchasing power
  2015 2016 2017 2018
Price gross domestic product (%)

0.8

0.6

1.0

1.7

Export price goods and services
(non-energy, %)

1.5

-0.9

1.2

0.8

Import price goods (%)

-5.4

-4.4

4.8

1.8

Inflation, harmonised index of
consumer prices (hicp, %)

0.2

0.1

1.3

1.5

Compensation per hour private sector (%)

-0.2

0.6

1.6

2.9

Contractual wages private sector (%)

1.2

1.5

1.6

2.2

Purchasing power, static, median,
all households (%)

1.0

2.6

0.3

0.6


Labour market
  2015 2016 2017 2018
Labour force (%)

0.4

0.4

0.9

1.1

Active labour force (%)

1.0

1.3

2.1

2.1

Unemployment
(in thousands of persons)

614

538

440

360

Unemployed rate (% of the labour force)

6.9

6.0

4.9

3.9

Employment (hours, %)

0.6

2.0

2.1

2.0


Other items
  2015 2016 2017 2018
Labour share in enterprise income
(level in %)

72.2

72.9

72.4

72.6

Labour productivity private sector
(per hour, %)

1.5

0.4

1.2

1.2

Private savings (% of disposable
household income)

-0.4

0.3

0.0

0.3

Current-account balance
(level in % GDP)

8.3

8.7

8.6

8.3


Public sector
  2015 2016 2017 2018
General government financial balance
(% GDP)

-2.1

0.4

0.5

0.5

Gross debt general government
(% GDP)

64.6

61.8

56.6

53.1

Taxes and social security contributions
(% GDP)

37.3

38.7

38.9

38.9

Gross government expenditure
(% GDP)

45.2

43.8

43.0

42.7

(a) CPB uses as of MEV 2018 a new method for the calculation of the labour share in enterprise income. This new method takes better account of the income of self-employed persons and therefore better matches current economic reality. A joint 'notitie' of CBS, CPB and DNB is available on this subject (only in Dutch).

Contacts

Foto Daniël van Vuuren
Daniël van Vuuren +31 6 52485859 Lees meer
Foto Wim Suyker
Wim Suyker +31 6 52485860 Lees meer

Contacts

Foto Daniël van Vuuren
Daniël van Vuuren +31 6 52485859 Lees meer
Foto Wim Suyker
Wim Suyker +31 6 52485860 Lees meer

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