Netherlands: Second estimate shows the economy expanded at the fastest clip in a decade in 2017
A second release on 26 March for growth in the final quarter of last year confirmed the first estimate: The Dutch economy grew 0.8% quarter-on-quarter (Q3: +0.4% quarter-on-quarter). Detailed data released by Statistics Netherlands (CBS) highlighted that in the fourth quarter the economy grew chiefly on the back of a solid performance by the external sector. In addition, full-year growth for 2017 was revised slightly upwards, from 3.1% to 3.2%, the fastest pace in a decade. This was mainly due to revisions to the first half of 2017.
The contraction in private consumption in the fourth quarter was revised slightly from the first estimate. Household expenditure dropped 0.2% quarter-on-quarter (previously reported: -0.3% qoq), despite unemployment remaining at multi-year lows throughout the period. Private consumption swung into contractionary territory in the fourth quarter, contrasting a solid 0.4% quarter-on-quarter expansion in the prior quarter. Due to the fall in household consumption, total consumption growth was flat, despite robust government consumption (Q4: +0.3 qoq, previously reported: +0.5% qoq; Q3: +0.3% qoq). Fixed investment growth in the final quarter was also flat, matching the first estimate. This was mainly due to a contraction in government fixed investment (Q4: -1.2% qoq; Q3: +14.2% qoq). Private fixed investment swung from a 0.3% qoq contraction in Q3 to a 0.2% expansion in Q4.
The external sector contributed positively as growth in exports of goods and services outpaced growth in imports. In the final quarter of 2017, export growth was logged at 1.6% qoq, with the exports of services picking up slack from a moderation in the pace of expansion of goods exported (Q3: +2.0% qoq). However, imports of goods and services slowed from a 2.1% qoq expansion in the third quarter to a 1.1% increase in the fourth quarter. Imports of both goods and services moderated.
A comparison on an annual basis also confirmed the first reading, with economic growth coming in at 2.9% in the fourth quarter, slightly below the prior quarter’s 3.0% year-on-year growth rate. While the pace of growth of exports was revised upwards, the expansion in fixed investment was downwardly revised. In year-on-year terms, exports grew 7.0% in the final quarter (previously reported: +5.5% year-on-year) as exports of services jumped from the prior quarter. However, fixed investment growth was revised down slightly and expanded 6.2% yoy in the final quarter, below the third quarter’s 6.6% yoy growth rate (previously reported: +7.0% yoy). Private consumption in the fourth quarter, however, was revised slightly upwards from the first estimate’s 0.9% yoy increase to a 1.0% yoy expansion. Household consumption was still significantly below the 2.1% expansion seen in the third quarter.
For the year as a whole, growth was broad-based in 2017, with domestic demand and the external sector performing strongly. Domestic demand was spurred by increased private consumption and a jump in public fixed investment. Private consumption grew 1.9% in 2017 (2016: +1.4% yoy) over the prior year, while total fixed investment expanded 5.6% last year from 2016’s 5.3% annual expansion. Finally, government consumption was stable at 1.2% year-on-year. The external sector contributed positively to economic growth, with export growth outpacing imports, largely thanks to a jump in services exports. Exports of goods and services grew 6.1% yoy in 2017 (2016: +4.3% yoy), while imports expanded 5.4% yoy (2016: 4.1% yoy).