Dutch economy growing more slowly than eurozone

Economic growth in the Netherlands has been lagging behind that of its main trading partners for some time now. In the first half of 2004 economic growth was lower than in the eurozone and the US. Higher economic growth in the countries with which the Netherlands does business in the first half of this year did stimulate Dutch exports.

Economic growth in the eurozone, the US and the Netherlands

Economic growth in the eurozone an in the Netherlands

The volume of gross domestic product (GDP) was 2.0 percent higher in the eurozone in the second quarter of 2004 than in the same quarter in 2003. In the first half of this year the growth in the eurozone was 1.7 percent.

That is higher than the 1.0 percent economic growth in the Netherlands in this period. Since the third quarter of 2002 Dutch economic growth has consistently been below that of the eurozone. The difference rose to 1.5 percent points in the second quarter of 2003. Since then it has diminished.

Economic growth in main trading partners of the Netherlands

Household consumption leads to higher growth in US

In the US, GDP growth was about 5 percent higher in the first half of 2004 than one year previously. Since the beginning of 2002 the economy in the US had been growing faster than in the eurozone and in the Netherlands. In the US household consumption has been a strong basis for GDP growth, which was nearly 4 percent higher in the first half of 2004 than twelve months previously.

This is substantially higher than in the Netherlands, where households spent slightly less in the first six months of 2004 than one year previously. No figures on household consumption in the eurozone are available for this period, but in the first quarter the increase in household consumption in the euro area was below 1 percent.

GDP (six countries) and Dutch exports

Growth abroad and Dutch exports

The economic growth of the Netherlands’ main trading partners is a very important factor in the development of Dutch exports. Nearly 70 percent of our goods exports went to Italy, Germany, France, Belgium, the United Kingdom and the US. Only in Italy was economic growth a fraction lower than in the Netherlands in the first half of this year. It Belgium it was more than twice as high, and in the UK the economy also performed relatively well.

If we weight economic growth in the six main trading partners by their proportion in Dutch exports, the average growth of the six countries in the first half of 2004 comes to 2.3 percent. Last year this was still only 0.8 percent. Since the first quarter of 2000 there has been a reasonable correlation between the weighted economic growth of these six countries and the development in total Dutch exports.

Frans van Ingen Schenau