Wed, May 17, 2017 - Page 10 News List

Improving eurozone takes Netherlands along with it

Bloomberg

As the eurozone’s economy improves, the spotlight moves between German strength or whether underperformers France and Italy will get their act together.

However, the Netherlands, the region’s fifth-largest economy, knows where it wants to be.

After growth of 2.1 percent last year, economists are raising their outlook for the Dutch economy in the coming years, saying it will expand 2 percent this year, 1.7 percent next year and 1.4 percent in 2019, a survey conducted from May 5 through Friday last week showed.

Data due yesterday were expected to show that Dutch GDP expanded 0.5 percent in the first quarter, a separate survey indicated.

The Netherlands is still trying to form a new government after Dutch Prime Minster Mark Rutte’s Liberal Party won elections earlier this year.

An attempt on Monday to form a coalition with the Greens, the Christian Democrats and D66 failed, 61 days after the March 15 ballot.

A new government would require at least four parties to join to get a majority in the Tweede Kamer, the Dutch lower house.

“Given the Dutch experience it could easily take many more weeks, or months, before a new government will take office,” ING Groep NV economist Dimitry Fleming said. “After two years of above-average growth, the economy is not showing any signs of slowing its pace.”

Inflation in the Netherlands last month increased 1.6 percent after rising 1.1 percent in March, and economists expect prices to rise by 1.5 percent this year and next year, the survey showed.

The unemployment rate has improved since January and fell to 5.1 percent in March from 5.3 percent in February.

Economists expect joblessness to average at 5.1 percent this year and 4.8 percent next year, the survey showed.

European Central Bank President Mario Draghi told Dutch lawmakers early last week that incoming eurozone data are “increasingly solid” and downside risks have diminished, while loose policy continues to be needed amid muted underlying inflation and wage growth.

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