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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Netherlands is the sixth-largest economic power in the Eurozone and the fifth-largest exporter of goods. The country is very open to trade and consequently to the global economic conjuncture. For the past few years, the recovery in Europe has allowed the Dutch economy to grow at a dynamic pace, although trade uncertainty at global level, the Brexit process and most of all the spread of the COVID-19 pandemic caused the Dutch economy to contract. Nevertheless, the Dutch economy has shown a rapid and strong recovery from the coronavirus recession of 2020, recording an estimated growth of 3.8% in 2021, on the back of a robust recovery in consumer demand and a favourable external environment, together with a rise in investment and government consumption. Economic growth is projected to remain robust this year (3.2%) underpinned by private consumption, before moderating to 2.1% in 2023. The scenario remains uncertain due to the surge in COVID-19 cases towards the end of the year. According to projections by the Dutch National Bank, the extension of containment measures could cut 2022 GDP growth by over two percentage points.

In recent years the government’s fiscal policy has been expansionary; nevertheless, the Dutch public finances remained sound, recording budget surpluses. The trend inverted as a consequence of the fiscal measures taken to contain the Covid-19-induced crisis, with a budget deficit of 5.2% recorded in 2021. As most measures expired and economic activity rebounded, the deficit should narrow to 1.5% this year and then again in 2023 as revenues increase (0.7% - IMF). Conversely, the debt-to-GDP ratio jumped to 58.1% in 2021 (from a pre-pandemic level of 47.4%), but is expected to follow a downward trend over the forecast period (56.2% this year followed by 54.8% in 2023). Inflation has risen sharply during the year and averaged 1.9% in 2021, driven by oil and gas price increases and a tight labour market. Temporary government measures (including cuts in energy taxes and tuition fees) should push projected inflation downwards in 2022 (1.7%).

The Netherlands presents a very high income per capita, which is distributed in a relatively equal manner. The GDP per capita is above the EU average and was estimated at USD 60,461 in 2021 (PPP – data IMF). Employment support measures were still in place for a large part of the year, resulting in a relatively low unemployment rate of 3.6% in 2021. Meanwhile, several sectors have been experiencing labour shortages, with the number of vacancies surpassing the number of unemployed. The IMF forecasts an increase in the unemployment rate in 2022 (4%); whereas the Dutch Central Bank expects wage growth to rise slowly to 2.4% in 2022 and 2.6% in 2023.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 910.30913.13e1,007.561,070.751,128.02
GDP (Constant Prices, Annual % Change) 2.0e-3.8e4.53.32.1
GDP per Capita (USD) 52,67352,45657,71561,15964,247
General Government Balance (in % of GDP) 1.8-3.2e-5.2-1.5-0.7
General Government Gross Debt (in % of GDP) 47.452.558.156.254.8
Inflation Rate (%) 2.71.1e1.91.71.8
Unemployment Rate (% of the Labour Force) 3.43.8e3.64.03.9
Current Account (billions USD) 85.3063.72e79.5892.8098.23
Current Account (in % of GDP) 9.47.07.98.78.7

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

The agricultural sector represents 1.6% of the country's GDP and employs 2% of the active population (World Bank, latest data available). This sector produces high yields, which is due in part to the intensive farming of arable land. Nearly 60% of the production is exported, either directly or through the food industry. This makes the Netherlands the second-largest exporter of agricultural products in the world (after the U.S.). The main crops exported are cereals, potatoes and horticultural products. The Netherlands is also the largest flower exporter in the world. According to the latest data from Agricultural Census, the number of companies active in the sector stands at 53,233. In 2021, the income of the Dutch agricultural sector was 1% higher than one year earlier. Whereas output increased in both arable farming and horticulture, livestock farming showed an income decline (Statistics Netherlands).

Industrial activity generates around 17.8% of the Dutch GDP, mainly through food-processing, the petrochemical industry, metallurgy and the transport equipment industry. The Netherlands is also one of the largest producers and distributors of oil and natural gas. The secondary sector employs 16% of the workforce. The World Bank estimates that the manufacturing sector alone accounts for 10.7% of the country's GDP.

Services account for over 69.8% of national revenue and employ 82% of the workforce. The services sector is focused mainly on transportation, distribution, logistics, banking and insurance, water engineering and new technologies. The country is also Europe's leading service provider in ocean freight, which is not surprising as its economy largely depends upon exports. The Dutch banking sector plays an important role in the economic functioning of the country and has a relatively large size when compared to the GDP, its assets accounting for 330% of GDP in 2021.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.1 16.1 81.8
Value Added (in % of GDP) 1.6 17.8 69.8
Value Added (Annual % Change) 0.4 -2.5 -4.3

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Dutch prosperity has always been based on its international trade, and the geographic location of the country makes it a European trade hub, with Rotterdam being the largest European port. With high-tech industries and services, foreign trade is one of the main pillars of the Dutch economy, representing an impressive 145.3% of GDP (World Bank – latest data available), one of the most open and outward-oriented economies in the world. The country mainly exports petroleum oils other than crude, processed foodstuff (plants, flowers, dairy products, meat, fruit and vegetables), line telephony electrical apparatus and medicaments. Exports of mineral fuels were hit hardest in 2020, falling by more than 34.4% compared to the previous year. Most of the sales are re-exportations as the country plays the role of a European trade hub. Imports are led by line telephony electrical apparatus, petroleum oils, automatic data-processing machines, electronic integrated circuits, and vehicles. Independent SMEs accounted for 19.6% of the total value of goods exports, while large enterprises accounted for more than 51.7%.

El superávit económico de los Países Bajos se debe casi por completo a su comercio con los países de la Unión Europea. Los principales socios comerciales del país son Alemania (22,1%), Bélgica (10,2%), Francia (7,7%) y el Reino Unido (7,2%), mientras que las importaciones proceden principalmente de Alemania (17,7%), China (10,6%), Bélgica (9,8%) y Estados Unidos (8,1% - OMC).

The country has a structurally positive trade balance for goods and services, which stood at around 10.4% of GDP for 2020 according to the World Bank. In the same year, the country’s exports of goods were worth USD 674.8 billion (a decrease of 4.7% year-on-year), with imports slowing at a faster pace (USD 596 billion; -6.2%); whereas for commercial services exports stood at USD 186 billion (down by almost one-third y-o-y), and imports at USD 169 billion (-36.2% - data by WTO). The latest data from the National Statistical Office shows that Dutch goods trade was above the pre-pandemic level in the first half of 2021: in the first six months of 2021, goods exports were up by EUR 42 billion relative to one year previously (+6%), as imports increased by EUR 35 billion (8%).

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 503,414574,646645,502635,678596,012
Exports of Goods (million USD) 569,705652,065726,697708,596674,870
Imports of Services (million USD) 169,458206,137259,180265,264169,030
Exports of Services (million USD) 179,776215,814258,207273,815185,980

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 148.9156.0158.8155.3145.3
Trade Balance (million USD) 72,64581,22684,60176,35879,749
Trade Balance (Including Service) (million USD) 79,95789,57896,35994,59097,120
Imports of Goods and Services (Annual % Change) -2.06.24.73.2-5.5
Exports of Goods and Services (Annual % Change) 1.76.54.32.0-4.8
Imports of Goods and Services (in % of GDP) 69.372.674.172.767.4
Exports of Goods and Services (in % of GDP) 79.583.484.782.577.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 5.14.34.03.63.4
Volume of imports of goods and services (Annual % change) 4.64.44.34.03.8

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
The Netherlands is a member of the following international economic organisations: IMF, European Union, ICC, WTO, G-10, OECD, among others. For the full list of economic and other international organisations in which participates the Netherlands click here. International organisation membership of the Netherlands is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by the Netherlands can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2020
Germany 22.1%
Belgium 10.2%
France 7.7%
United Kingdom 7.2%
United States 5.0%
See More Countries 47.7%
Main Suppliers
(% of Imports)
2020
Germany 17.7%
China 10.6%
Belgium 9.8%
United States 8.1%
United Kingdom 4.7%
See More Countries 49.2%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: Willem-Alexander (since 30 April 2013) - hereditary
Prime Minister: Mark Rutte (since 14 October 2010 - acting Prime Minister after he resigned on 15 January 2021)
Next Election Dates
First Chamber: May 2023
Second Chamber: 31 March 2025
Current Political Context
After Prime Minister Mark Rutte resigned in January after thousands of families were wrongly accused of child welfare fraud and told to pay back the funds they had received, new elections were held in March 2021. Nevertheless, the country entered a political deadlock, as political parties could not agree to form a ruling coalition, resulting in Rutte leading a caretaker government until the end of the year. Only in December, nine months after the elections, Prime Minister Mark Rutte has secured a fourth term in office by renewing a largely centrist alliance between his conservative and economically liberal VVD and the liberal-centrist D66, the centre-right CDA, and the conservative CU.
Main Political Parties
The Netherlands has a two-tier parliament divided into two chambers. The main parties are:

- People’s Party for Freedom and Democracy (VVD): centre-right, based on free market ideas, liberal
- Democrats 66 (D66): centre, progressive-liberal and radical-democratic political party
- Party for Freedom (PVV): right-wing, known for hard stands on immigration
- Christian Democratic Appeal (CDA): centre, Christian democrats
- Socialist Party (SP): left-wing, extremely socialist
- Labour Party (PvdA): centre-left, social-democratic party
- Greenleft (GL): centre-left, eco-socialist and anti-capitalist political party
- Party For The Animals (PvdD): Environmentalism, Animal Rights, Soft-Euroscepticsm
- ChristianUnion (CU): centre, orthodox reformed political party with centre-left ideals
- 50 Plus (50+) : Pensioners interest, populism
- Reformed Political Party (SGP) : Christian Right, Social Conservatism
- DENK : Minority Rights , Identity Politics
- Forum For Democracy: National Conservatism
Executive Power
The Chief of State is the King, whose role is cerimonial. Following parliamentary (lower house) elections, the leader of the majority party or of a majority coalition is usually appointed Prime Minister (head of the Government) by the Monarch to serve a four year term. The Council of Ministers is appointed by the monarch on recommendation of the Prime Minister.
Legislative Power
Legislative power is bicameral. The parliament is called States General and consists of two chambers: the First Chamber (upper house, 75 members indirectly elected) and the Second Chamber (lower house, 150 members directly elected). Members of both chambers serve a four-year term. The Government has the right to dissolve the parliament, either one or both of the chambers.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in the Netherlands, please visit the website of the National Institute for Public Health and the Environment (RIVM) which provides the official data.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures
To find out about the latest public health situation in the Netherlands and the current sanitary measures in vigour, please consult the dedicated pages on the portal of the Dutch government. The website of the National Institute for Public Health and the Environment (RIVM) is also a useful source for up-to-date information on the containment suggestions put in place in the country and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

 

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the relevant pages on the portal of the Dutch Customs (Belastingdienst).
The “Guidelines for border management measures to protect health and ensure the availability of goods and essential services” issued by the European Commission can be consulted
here.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to the Netherlands on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

The official governmental portal Business.gov.nl provides detailed information on the economic recovery scheme put in place in the Netherlands to address the impact of the COVID-19 pandemic. Further details can be found on the portal InvestinHolland.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the website of
the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Dutch government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to the Netherlands in the
IMF’s Policy Tracker platform.

Support plan for businesses

The official portal Business.gov.nl provides comprehensive information on the government measures to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, as well as a FAQ section for entrepreneurs. Another important source of information is represented by the official portal Invest in Holland.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.

You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

The support package for Dutch exporters during the COVID-19 crisis can be consulted on the dedicated page on the official portal Business.gov.nl. The website of the Dutch Customs (Belastingdienst) is also a useful source of information.
The European Commission adopted a Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak, which enables short-term export credit insurance to be provided by the State where needed.

 

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