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Netherlands

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Politics:

  • Analysis

    Netherlands politics: New Dutch government put to the test

    Within six weeks of being sworn in, the Dutch government has been put to the test. After a political crisis following the proposal to introduce income-dependant healthcare contributions was narrowly averted in mid-November, the prime minister, Mark Rutte (leader of the Liberal Party, VVD), faces a number of new challenges. First of all, he has to restore confidence among his own party members, who fervently opposed the healthcare reform. Second, he has to defend the governing accord in front of the Senate, where the coalition of the Liberals and Labour Party (PvdA) does not hold a majority of seats. Combined with worse than expected economic forecasts and an expense scandal surrounding a junior minister, it is hardly surprising that the opinion polls show some drastic shifts since the September election. Confidence in government effectiveness is unlikely to be restored in the short term.

    Reversing the decision to introduce income-dependent healthcare contributions was the only possible outcome after the en masse opposition to the proposed policy by Mr Rutte's own party members. The crisis surrounding the healthcare plan had really been caused by two developments. First, VVD members could not agree to a measure that was primarily of a redistributive nature and would disproportionately and substantially affect middle- to high-income households. On a more general level, the government was criticised heavily by voters across the country for the way in which it (mis)informed the public about the effects of the healthcare plan on household purchasing power, presenting revised figures almost daily. Replacing the healthcare reform with a higher level of redistributive taxes seemed the only way to survive the crisis, but it will take some time for full confidence in the government to be restored.

    Government minority in the Senate

    The VVD and PvdA hold 79 out of 150 seats-that is, a sufficient majority-in the main legislative assembly, the Second Chamber of parliament. Hence, we expect that, apart from the healthcare reform, most proposals contained in the governing accord will be approved. However, finding sufficient support for the plans in the less powerful First Chamber of parliament, or Senate, is likely to prove more difficult; here, the governing parties only hold 30 out of 75 seats, reflecting the results of the indirect elections on May 11th 2011. This means that for each proposal, the government has to secure support from opposition parties.

    Parliamentary standings
    (seats in parliament)
     First Chamber (out of 75) Second Chamber (out of 150) 
    Liberals (VVD)16 41 
    Labour Party (PvdA)14 38 
    Party for Freedom (PVV)10 15 
    Socialist Party (SP)8 15 
    Christian Democratic Appeal (CDA)11 13 
    Democrats 66 (D66)5 12 
    Christian Union (CU)2 5 
    GreenLeft (GL)5 4 
    Reformed Political Party (SGP)1 3 
    Party for the Animals (PvdD)1 2 
    50Plus1 2 
    Independent Senate Group (OSF)1 0 
    Total75 150 
         
    VVD-PvdA coalition30 79 
    Sources: Economist Intelligence Unit; Eerste Kamer; Kiesraad; NOS.

    Although discussions are still ongoing, it is likely that the Senate will disagree with a number of proposals. These include:

    • replacing the student grant and a free public transport pass with a student loan;

    • increasing property rental fees; and

    • merging the three provinces of Utrecht, Noord-Holland and Flevoland (the so-called Randstad).

    With regard to a number of other proposals, full Senate approval remains uncertain. These include:

    • reducing the period of sickness pay;

    • cutting the infrastructure budget;

    • limiting interest-free pension savings;

    • reducing childcare subsidies; and

    • introducing a tax on large financial transactions.

    Positively, the government is likely to get Senate approval for the following measures:

    • reducing redundancy pay;

    • introducing an earlier rise in the retirement age;

    • increasing fixed healthcare contributions;

    • reducing the budget for chronic (health) care;

    • limiting mortgage tax relief (albeit with a short delay in implementation until April 2013);

    • reducing the development aid budget; and

    • stricter conditions for receiving unemployment benefit.

    Weak economic outlook

    Complications were added to the discussions about the governing accord when De Nederlandsche Bank (DNB, the central bank) published its latest half-yearly economic forecasts for 2013. According to the DNB's public announcement on December 10th, the Dutch economy is facing further economic weakness, with the real GDP forecast revised down to -1% for 2012 and -0.6% for 2013. The DNB believes that the economy will only start growing again in 2014. Hence, the DNB forecasts are similar to our own (-1% in 2012 and -0.8% in 2013). The revision is substantial: in June this year the DNB had still expected a decline of only 0.6% for 2012 and growth of about 0.6% in 2013.

    The forecasts have consequences for the budget accord. If the recession continues into 2013 as now looks likely, the Netherlands will struggle to reduce its budget deficit from an official estimate of 3.7% of GDP at end-2012 to the target of 3% of GDP for 2013, which is also the EU ceiling based on the Stability and Growth Pact. The DNB has warned that even in 2014 this target may be difficult to achieve. The government's macroeconomic forecasting agency, the Central Planning Bureau (CPB), will be presenting its own figures in the third week of December, and we expect that it too will revise down its forecasts.

    So far, the government has said that it will not adjust the governing accord based on these predictions and that it will await the mid-term budget review in March 2013 to see where things stand. However, given the difficulties that the government has already faced in trying to make the currently planned budget adjustments, some tough negotiations are likely to lie ahead.

    Expense scandal leads to further decline in confidence

    The political scene in the first week of December was marked by another event, which led to a further decline in confidence in government effectiveness. The PvdA junior minister of economic affairs, Co Verdaas, resigned after rumours about allegedly illegitimate expense claims. It remains uncertain whether the allegations are true or not, but Mr Verdaas thought it would be wiser to leave regardless. The event has strengthened critics of the new government, which was formed in record time; many critics point out that the government now seems to suffer from a government-formation process that was conducted too hastily and under too much pressure.

    These developments combined have led to a significant reversal of fortunes for the governing parties in the opinion polls. Maurice de Hond's poll of December 9th indicates that the parties currently in government (VVD and PvdA) would only get 45 seats of 150 seats in the Second Chamber if a fresh election was held, down from 79 in the current parliament. The big winner would be the VVD's rival on the right of the political spectrum, the populist, anti-Islam and Eurosceptic party of Geert Wilders (the Freedom Party or PVV), which would get 24 seats instead of the current 15. The other main beneficiary is the PvdA's rival on the left of the political spectrum, the anti-austerity and Eurosceptic Socialist Party (SP). Other opposition parties, including Democrats 66 (D66), the Christian Democratic Appeal (CDA) and the Pensioners' Party (50Plus), are also up in the polls.

    Many Dutch voters had hoped that the coalition between the centrist parties VVD and PvdA would finally lead to a stable government after several years of unstable coalitions, but this now seems some way off.

    Parliamentary standings and opinion poll
    (seats in Second Chamber of parliament)
     General electionOpinion poll 
     (Sep 12th 2012)(Dec 9th 2012) 
     seatsseatsdifference
    Liberals (VVD)4122-19
    Labour Party (PvdA)3823-15
    Party for Freedom (PVV)15249
    Socialist Party (SP)15227
    Christian Democratic Appeal (CDA)13174
    Democrats 66 (D66)12186
    Christian Union (CU)561
    GreenLeft (GL)43-1
    Reformed Political Party (SGP)341
    Party for the Animals (PvdD)231
    50Plus286
    Others000
    Total150150 
    VVD-PvdA coalition7945-34
    Sources: Economist Intelligence Unit; Maurice de Hond.

    December 14, 2012

  • Background

    Netherlands: Key figures

    Mark Rutte

    Mr Rutte became Dutch prime minister in October 2010, leading the country's first minority government, after a long and difficult period of coalition-building. Governing without a majority in parliament, Mr Rutte has faced a difficult task of managing the uneasy co-operation between the Christian Democratic Appeal (CDA, his coalition partners) and the formal parliamentary support party, the Party for Freedom (PVV). As leader of the Liberals (VVD) since 2006, Mr Rutte repositioned the party towards the political centre with moderate, neo-liberal policies. He is a skilled debater with a good knowledge of departmental briefs.

    Maxime Verhagen

    Mr Verhagen is the leader of the CDA and has been economy minister and deputy prime minister since October 2010. His party scored its lowest vote share for years at the 2010 election, and was facing a period in opposition, until a right-wing coalition became the preferred option. Elements of the CDA are uncomfortable at the close co-operation with the PVV, but he has so far been able to keep these sentiments in check. Mr Verhagen was an able leader of the CDA parliamentary group from 2002 until early 2007, after which he gained the long-coveted foreign affairs portfolio.

    Geert Wilders

    Mr Wilders has had one of the most stellar rises in Dutch politics in recent times. He is head of the country's third-largest party, the PVV, which he formed after defecting from the VVD in 2004. The PVV rose in popularity in 2008-09, benefiting from Mr Wilders's ability to popularise anti-immigrant, anti-Islamic and anti-establishment ideas, and topped opinion polls for some time. At the 2010 election, the PVV won 15% of the vote and became a formal government support party. Mr Wilders faces the challenge of managing a party that has risen quickly but without building a party structure or a local-government presence. His leadership has also been attacked by internal party critics for lacking democracy. He is being prosecuted for inciting hatred and discrimination, but this action has so far mainly succeeded in raising his profile further.

    Job Cohen

    Mr Cohen, who was mayor of Amsterdam in 2001-10, took over as leader of the Labour Party (PvdA) in the wake of the government's collapse in February 2010. Mr Cohen led the PvdA to second place in the 2010 election but was unable to secure a place for the party in the governing coalition. He now leads the PvdA's parliamentary grouping. Mr Cohen was considered to have been a competent mayor but had never held a high-profile ministerial post before. In the 1990s he was junior government member and was offered the post of education minister. In the 2003 general election he was the PvdA's candidate for prime minister.

    Alexander Pechtold

    The leader of the centrist Democrats 66 (D66) led a remarkable revival after the 2006 general election, when the party almost vanished from the political scene. D66 rose steadily in the polls, to a level where it challenged the largest parties. Mr Pechtold's success has been attributable in large part to his outspoken criticism of Mr Wilders's populism, and for a while he was the leader with the highest appreciation rate, but he was only partly able to translate this popularity into electoral success at the 2010 election. D66 featured only briefly in possible coalition combinations after the election.

    June 07, 2011

  • Structure

    Netherlands: Political structure

    Official name

    Kingdom of the Netherlands

    Form of state

    Constitutional monarchy

    National legislature

    Bicameral Staten Generaal (parliament); First Chamber (Eerste Kamer, Senate) of 75 members elected by provincial states (regional parliamentary assemblies); Second Chamber of 150 members, directly elected for a four-year term. The First Chamber can only approve or reject bills and may not initiate or amend them

    Electoral system

    Universal direct suffrage over the age of 18. The whole country forms a single constituency, and the Second Chamber is elected by the d'Hondt system of proportional representation. The First Chamber is elected indirectly

    National elections

    A general election was held on September 12th 2012. The next regular election is not scheduled before September 2016

    Head of state

    Queen Beatrix, who acceded to the throne in 1980

    State legislatures

    The 12 directly elected provincial states are responsible for electing the First Chamber of the Staten Generaal (the Senate) and overseeing regional government. They also have the power to raise regional taxes. The governing executive of each state is elected, but is presided over by a commissioner appointed by the Crown

    National government

    Council of Ministers headed by the prime minister, responsible to the Staten Generaal. A centrist "grand coalition" government of the centre-right People's Party for Freedom and Democracy (VVD) and the centre-left Labour Party (PvdA) was sworn in on November 5th. Although ministers can introduce bills and speak in the legislature, they may not be members of either house

    Main political parties

    People's Party for Freedom and Democracy (Liberals, VVD); Labour Party (PvdA); Party for Freedom (PVV); Socialist Party (SP); Christian Democratic Appeal (CDA); Democrats 66 (D66); Christian Union (CU); GreenLeft (GL); Reformed Political Party (SGP); Party for the Animals (PvdD); 50Plus

    Council of Ministers

    Prime minister: Mark Rutte (VVD)

    Deputy prime minister & minister for social affairs and employment: Lodewijk Asscher (PvdA)

    Key ministers

    Defence: Jeanine Hennis-Plasschaert (VVD)

    Economic affairs, agriculture & innovation: Henk Kamp (VVD)

    Education, culture & science: Jet Bussemaker (PvdA)

    Finance: Jeroen Dijsselbloem (PvdA)

    Foreign affairs: Frans Timmermans (PvdA)

    Health, welfare & sport: Edith Schippers (VVD)

    Home affairs & kingdom relations: Ronald Plasterk (PvdA)

    Infrastructure & environment: Melanie Schultz van Haegen-Maas Geesteranus (VVD)

    Justice & security: Ivo Opstelten (VVD)

    Central bank governor

    Klaas Knot

    December 04, 2012

  • Outlook

    Netherlands: Key developments

    Outlook for 2013-17

    • The pro-business Liberals (VVD) and the centre-left Labour Party (PvdA), which both performed well at the general election on September 12th, have formed a "grand coalition" government.
    • At the election, voters returned to the political centre, moving away from the right-wing and left-wing parties that had threatened to fragment the party landscape. This will boost political stability.
    • Ensuring financial stability and narrowing the budget deficit will be a focus of the new government. The deficit is forecast to shrink gradually to below 2% of GDP by 2017, with public debt peaking at almost 75% of GDP in 2014.
    • The Economist Intelligence Unit expects another real GDP contraction in 2013, of 0.8%, after an estimated drop of 1% in 2012. We expect sluggish average growth in 2014-17, of 1.4%. Private consumption will be particularly weak.
    • An intensification of the euro area debt crisis is a downside risk to our forecast, as it could lead to a banking crisis and even the break-up of the euro.
    • Inflation is estimated to average 2.9% in 2012, before falling to 2.3% in 2013-17.
    • We expect the current-account surplus to fall to 6.9% of GDP by 2017.

    Review

    • The new government survived its first major political crisis over the planned introduction of income-dependent healthcare contributions.
    • After the VVD's core voters and members withdrew their support, the government was forced to scrap the original plan. Moreover, the top marginal income-tax rate will now not be reduced as originally planned.
    • Provisional seasonally and working-day adjusted data show that real GDP fell by 1.1% quarter on quarter amid a broad-based downturn. Domestic demand was exceptionally weak.
    • In September goods exports rose by 2.1% year on year, up from 1.8% in August but lower than earlier this year. Import growth (3.1%) was slightly stronger.
    • Consumer spending recorded zero year-on-year growth in September after 13 consecutive contractions, but consumer confidence fell further in November.
    • Private-sector investment in tangible fixed assets fell by a hefty 8.5% year on year in September, the weakest reading since May 2010.
    • In October the unemployment rate (EU harmonised measure) rose to 5.5%, up from 5.4% in September and 4.8% in October 2011.
    • Consumer price inflation (EU harmonised measure) rose to 3.3% in October, the highest inflation rate for ten years and well above the euro zone average.

    December 04, 2012

Economy:

  • Background

    Netherlands: Country fact sheet

    Fact sheet

    Annual data2011aHistorical averages (%)2007-11
    Population (m)16.7Population growth0.4
    GDP (US$ bn; market exchange rate)838.4bReal GDP growth0.9
    GDP (US$ bn; purchasing power parity)715.4bReal domestic demand growth0.6
    GDP per head (US$; market exchange rate)50,315Inflation1.8
    GDP per head (US$; purchasing power parity)42,938Current-account balance (% of GDP)6.7
    Exchange rate (av) €:US$0.72bFDI inflows (% of GDP)4.4
    a Economist Intelligence Unit estimates. b Actual.

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    Background: The Netherlands has been a constitutional monarchy since 1848. From the early 20th century onwards, a party system developed based on segmented confessional and ideological backgrounds. After the second world war, full employment and the discovery of gas resources helped the Netherlands to build an extensive welfare system (since pared back) and colonies were granted independence. The Netherlands was a founder member of the European Community and its successor, the EU, although its 2005 vote against the EU constitutional treaty revealed a degree of Euroscepticism.

    Political structure: The Netherlands has a two-tier parliament, the Staten Generaal. The First Chamber (or Senate) of 75 members is elected by the provincial councils every four years and has powers to accept or reject legislation. The Second Chamber of 150 members is elected by proportional representation every four years and is the primary lawmaking body. Following a snap general election in September 2012, a centrist "grand coalition" government took office in early November.

    Policy issues: The government is focusing on fiscal consolidation, including a mixture of tax increases and spending cuts. The bulk of savings will be made through reductions in healthcare spending and social security spending (especially unemployment benefit). Euroscepticism in the electorate will complicate the Netherlands' contribution to resolving the euro area debt crisis. The strength of far-right parties continues to highlight concerns about immigration and integration. Deployment of the Dutch military, such as in Afghanistan, will be hotly debated.

    Taxation: The main corporation-tax rate is 25%, and a lower rate of 20% exists for the first EUR200,000 of profits, mainly benefiting small and medium-sized enterprises (SMEs). The Corporation Tax Act provides for a participation exemption, preventing double taxation when the profits of a subsidiary are distributed to its parent firm abroad. Withholding tax levied abroad may generally be offset against income or corporation tax payable by the taxpayer in the Netherlands. The basic rate of value-added tax (VAT) is 21%, with a lower rate for essential goods such as food and medicines at 6%.

    Foreign trade: In 2011, with merchandise exports at US$550bn and imports at US$485bn, the Netherlands recorded a trade surplus of US$65bn. The current-account surplus was US$82bn (9.7% of GDP).

    Main exports fob 2011% of totalMain imports cif 2011% of total
    Machinery & transport equipment27.6Machinery & transport equipment28.4
    Manufactured goods18.3Mineral fuels, lubricants etc21.7
    Chemicals17.5Manufactured goods21.2
    Mineral fuels, lubricants etc16.1Chemicals12.9
    Food & live animals11.9Food & live animals8.8
     
    Leading markets 2011% of totalLeading suppliers 2011% of total
    Germany24.1Germany16.7
    Belgium12.1Belgium10.0
    France8.9China8.4
    UK8.0Italy4.8
    EU74.6EU53.3

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    December 04, 2012

  • Structure

    Netherlands: Economic structure

    Data and charts: Annual trends charts


    December 04, 2012

  • Outlook

    Netherlands: Country outlook

    Netherlands: Country outlook

    FROM THE ECONOMIST INTELLIGENCE UNIT

    POLITICAL STABILITY: On November 5th, a new "grand coalition" government between the centre-right Liberals (VVD) and the centre-left Labour Party (PvdA) was officially sworn in. The government formation agreement came less than two months after the snap general election on September 12th, making this one of the fastest government formation processes in recent Dutch history; between 1977 and 2010, it took 86 days on average for each of the 13 previous cabinets to be formed. The pace at which the party leaders, Mark Rutte (VVD) and Diederik Samsom (PvdA), have found compromise on major divisive issues (see below) indicates that they wanted to send a message of political unity and decisiveness after ten years of political instability (with five elections) since 2002. Until recently, the Dutch political landscape had been at a risk of fragmentation, with the political centre squeezed by populist right-wing and left-wing forces. The unstable minority government that preceded the new VVD-PvdA coalition highlighted the risk of increasingly ineffective government in the Netherlands. The 2012 election, however, marked a victory for the political centre, perhaps indicating the electorate's wish for greater stability.

    ELECTION WATCH: The next scheduled municipal elections will be held in March 2014. A European Parliament election is due in 2014 and provincial elections (to the First Chamber) in May 2015. The next regular Second Chamber elections are not scheduled before 2016.

    INTERNATIONAL RELATIONS: The new government is likely to remain committed to European integration, but rising Euroscepticism among the electorate will make the country a difficult participant in euro area rescue mechanisms. The debt crisis represents a grave threat to Dutch economic and financial stability, but support is low among the electorate for contributing taxpayers' money to bail-outs of euro area sovereigns or to emergency credit facilities. The continuing focus on fiscal consolidation domestically means that the Netherlands is likely to remain a key ally of Germany in prioritising fiscal austerity in the highly indebted peripheral euro zone countries as a precondition for further financial support. The coalition agreement also stresses the Netherlands' support for the gradual establishment of a European banking union. The traditionally pro-EU PvdA has obtained the key portfolios in the new cabinet (led by Mr Rutte as prime minister) that deal with the euro zone crisis, namely foreign affairs (Frans Timmermans) and finance (Jeroen Dijsselbloem). In particular, the replacement of the previous minister of finance, Jan Kees de Jager (Christian Democratic Appeal, CDA), who has opposed debt mutualisation and stronger federal fiscal competence in the euro zone, may mark a shift in rhetoric (although probably less in policy) under the new government.

    POLICY TRENDS: The new VVD-PvdA government's policy programme focuses on deficit-narrowing. Structural reforms to boost medium-term growth and prepare the economy for population ageing are also envisaged. VVD-PvdA plans for pension reform would raise the official retirement age gradually from 65 currently to 66 by 2018 and 67 by 2021. Reform of financial services aims to make the system less dependent on state backing during crises. A banking sector levy, to prefund the deposit guarantee scheme, is a central element of this policy. A state-owned bank, ABN Amro, will not be privatised until financial market stability has returned. Minority stakes in two other financial institutions, ING and SNS Reaal, are being gradually repaid by the institutions themselves.

    ECONOMIC GROWTH: The Economist Intelligence Unit recently revised down its forecasts after a real GDP contraction in the third quarter of 2012 (1.1% quarter on quarter) highlighted the depth of the Netherlands' economic downturn. We now expect another contraction in real GDP in 2013, of 0.8% (previously: growth of 0.3%), after an estimated drop of 1% in 2012 (previously: 0.7%), particularly in the light of sluggish domestic demand. A meagre recovery in domestic demand and a stronger one in foreign demand should contribute to a modest pick-up in real GDP growth, to 1.4% on average during 2014-17. An intensification of the euro area debt crisis is a downside risk to our forecast, as it could lead to a banking crisis and even the break-up of the euro.

    INFLATION: We expect EU harmonised inflation to fall only slightly from an estimated 2.9% in 2012 to 2.7% in 2013, well above the euro area averages (2.4% and 2.1%, respectively). The rate should then moderate to an average of 2.2% in 2014-17.

    EXCHANGE RATES: Although not our central forecast, there is a high risk that several countries will leave the euro zone in the next two years. Such fears have led to flight from euro assets and partly explain the volatility of the currency, which depreciated from above US$1.40:EUR1 in August 2011 to a two-year low of US$1.21:EUR1 in July 2012. It then strengthened moderately to US$1.30:EUR1 in late November, in response to the promise of central bank intervention to contain interest rates on distressed government bonds. Even assuming that the euro survives in its present form, it will remain volatile owing to shifting risk appetite, economic weakness and lower reserve accumulation by Asian economies. We forecast average exchange rates of US$1.26:EUR1 in 2013 and US$1.25:EUR1 in 2014-17, but sharp movements in either direction remain a significant risk.

    EXTERNAL SECTOR: The Netherlands will continue to record large but shrinking current-account surpluses in 2013-17, following an estimated surplus of almost 10% of GDP in 2012. The current account will still benefit from structural surpluses on the merchandise trade, services and income accounts. The current transfers account will remain in deficit.

    December 01, 2012

  • Forecast

    Netherlands: Country forecast summary

    Country forecast overview: Highlights

    • The centre-right Liberals (VVD) and the centre-left Labour Party (PvdA) formed a "grand coalition" government after coming first and second, respectively, at the general election on September 12th. At the election, voters returned to the political centre, moving away from the right-wing and left-wing parties that had threatened to fragment the party landscape. This will boost political stability.
    • The new government's budgetary strategy focuses on fiscal consolidation, with a mixture of spending cuts and tax increases. However, a weak economy and/or government divisions could cause delays in achieving budget balance. From an estimated 4.1% of GDP in 2012, the general government budget deficit is expected to shrink to below 2% of GDP by 2017. Public debt is expected to rise from an estimated 70.4% of GDP in 2012 to just below 72% by 2017, peaking at almost 75% in 2014.
    • The euro area debt crisis remains a challenge. The Netherlands is expected to continue to back the German-led approach to the crisis, calling for tough oversight of euro area members with weak public finances. However, this stance may weaken, especially if the Netherlands' own public finances remain under pressure. Moreover, reluctance to support further bail-outs of weaker states is growing. Measures to boost governments' and banks' liquidity have helped to restore a degree of market confidence, but concerns persist about the EU's financial system and the potential break-up of the euro.
    • The European Central Bank (ECB) is likely to reduce its policy rate by a further 25 basis points in the months ahead, after cutting it to 0.75% in July. It will also continue its liquidity provision to banks, and has announced a restart of its sovereign bond buying programme to support financial and economic stability.
    • The Economist Intelligence Unit expects another real GDP contraction in 2013, of 0.8%, after an estimated drop of 1% in 2012. We forecast sluggish average growth in 2014-17, of 1.4%, driven especially by relatively robust export growth. However, private consumption is set to remain particularly weak. A deterioration of the euro area debt crisis could dampen the recovery significantly.
    • Inflation is set to moderate to 2.3% on average in 2013-17, from 2.9% in 2012.
    • The current-account surplus is forecast to shrink to 6.9% of GDP by 2017.
    • We forecast that the euro will average US$1.26:EUR1 in 2013 and US$1.25:EUR1 in 2014-17, but sharp movements in either direction remain a significant risk.

    Country forecast overview: Key indicators

    Key indicators201220132014201520162017
    Real GDP growth (%)-1.0-0.80.71.51.71.6
    Consumer price inflation (av, %; EU harmonised measure)2.92.71.82.62.12.2
    Budget balance (% of GDP)-4.1-3.5-2.8-2.6-2.1-1.7
    Current-account balance (% of GDP)9.89.48.77.97.16.9
    Short-term interest rate (av; %)0.60.20.61.11.81.8
    Exchange rate US$:€ (av)1.281.261.251.241.261.26
    Exchange rate ¥:€ (av)101.9104.3108.6110.1116.1115.1

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    December 04, 2012

Country Briefing

Total area

41,526 sq km (including inland waters): 57.9% cultivated land, 7.6% forest, 7.5% built-up, 17.4% water, 3.5% nature reserve, 6.1% other

Population

16.7m (November 2011)

Main towns

Population in '000, end-December 2010

Amsterdam (joint capital): 780

Rotterdam: 610

The Hague (joint capital): 495

Utrecht: 311

Eindhoven: 216

Tilburg: 206

Climate

Temperate European continental climate subject to oceanic influences

Weather in Amsterdam (altitude 3 metres)

Hottest month, July, 13-22°C (average daily minimum and maximum); coldest month, January, 1-5°C; driest month, March, 45 mm average rainfall; wettest month, August, 85 mm average rainfall

Language

Dutch

Measures

Metric system

Currency

Euro (€) = 100 cents; in 2011: US$1.39:€1

Time

1 hour ahead of GMT, 2 hours ahead in the summer months

Public holidays

New Year's Day (January 1st), Good Friday (April 6th), Easter Monday (April 9th), Ascension Day (May 17th), Whit Monday (May 28th), Christmas Day (December 25th), Boxing Day (December 26th)

March 01, 2012

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