{
  "title": "Netherland's Economic Outlook in Five Charts",
  "publication": "IMF News, February 14, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/02/07/na021219-netherlands-economic-outlook-in-five-charts",
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  "summary": "Growth in the Netherlands has picked up and unemployment has fallen sharply in recent years. But real wage and productivity growth have been slow, possibly exacerbated by the increasing share of short-term labor contracts.",
  "publishDate": "2019-02-14",
  "sections": [
    {
      "heading": "Overview and recent performance",
      "content": "- Growth in the Netherlands has picked up in recent years.\n- Unemployment has fallen sharply, reaching a historic low of 3.8 percent.\n- Wages grew moderately and inflation remained subdued.\n- Real wage and productivity growth have been slow, possibly exacerbated by the increasing share of short-term labor contracts.\n- The high savings rate and low level of domestic investment by large multinationals, as well as the high debt and illiquid assets of households, are hindering a pickup in the country's growth potential."
    },
    {
      "heading": "External position and trade",
      "content": "- The current account surplus remains high at almost 10 percent of GDP, reflecting high corporate savings by mostly multinational corporations residing in the Netherlands.\n- Slower global trade and expedited phasing-out of gas production are expected to lead to lower exports and a modest rebalancing in the short term.\n- Returns on a rising net foreign assets position will preserve the large current account surplus over the medium term."
    },
    {
      "heading": "Household sector and domestic demand",
      "content": "- Low wage growth and sizeable labor income taxation are compressing disposable income and limiting domestic demand.\n- Household debt remains high, even though households have positive net worth.\n- Households are left too cash-constrained to effectively weather downturns and support rebalancing.\n- Policy note: Scaling down mortgage interest deductibility beyond current plans would help address the debt bias but needs to go hand-in-hand with more affordable rental opportunities."
    },
    {
      "heading": "Fiscal position and constraints",
      "content": "- The Netherlands' fiscal position is strong, resulting in declining public debt and sizeable fiscal space.\n- Fiscal policy is limited in its potential for rebalancing demand by national rules and capacity constraints.\n- Attempts to fully use the available fiscal space in 2018 were unsuccessful due to difficulties with hiring against a background of low unemployment.\n- Near-term budget plans imply greater spending.\n- Public debt is projected to decline below 40 percent of GDP by 2024, reopening substantial fiscal space over the medium term."
    },
    {
      "heading": "Policy recommendations to support rebalancing and medium-term growth",
      "content": "- Boost disposable income by bringing it closer in line across different types of labor contracts.\n- Further lower the weight of tax on labor.\n- Foster productivity and wage growth.\n- Promote the growth of small and medium-sized enterprises by:\n  - Expanding direct support to research and development.\n  - Investing in digitalization and lifelong learning.\n  - Establishing a business credit bureau.\n\nNetherland's Economic Outlook in Five Charts — February 14, 2019\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- Read the report\n- Read the selected issues\n- Read the press release\n- The Netherlands and IMF\n- Euro economic outlook\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/02/07/na021219-netherlands-economic-outlook-in-five-charts"
    }
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    "Published: February 14, 2019",
    "Growth in the Netherlands has picked up in recent years.",
    "Unemployment has fallen sharply, reaching a historic low of 3.8 percent.",
    "Wages grew moderately and inflation remained subdued.",
    "Real wage and productivity growth have been slow, possibly exacerbated by the increasing share of short-term labor contracts.",
    "The high savings rate and low level of domestic investment by large multinationals, as well as the high debt and illiquid assets of households, are hindering a pickup in the country's growth potential.",
    "The current account surplus remains high at almost 10 percent of GDP, reflecting high corporate savings by mostly multinational corporations residing in the Netherlands.",
    "Slower global trade and expedited phasing-out of gas production are expected to lead to lower exports and a modest rebalancing in the short term.",
    "Returns on a rising net foreign assets position will preserve the large current account surplus over the medium term.",
    "Low wage growth and sizeable labor income taxation are compressing disposable income and limiting domestic demand.",
    "Household debt remains high, even though households have positive net worth.",
    "Households are left too cash-constrained to effectively weather downturns and support rebalancing.",
    "Policy note: Scaling down mortgage interest deductibility beyond current plans would help address the debt bias but needs to go hand-in-hand with more affordable rental opportunities.",
    "The Netherlands' fiscal position is strong, resulting in declining public debt and sizeable fiscal space.",
    "Fiscal policy is limited in its potential for rebalancing demand by national rules and capacity constraints.",
    "Attempts to fully use the available fiscal space in 2018 were unsuccessful due to difficulties with hiring against a background of low unemployment.",
    "Near-term budget plans imply greater spending.",
    "Public debt is projected to decline below 40 percent of GDP by 2024, reopening substantial fiscal space over the medium term.",
    "Boost disposable income by bringing it closer in line across different types of labor contracts.",
    "Further lower the weight of tax on labor.",
    "Foster productivity and wage growth.",
    "Promote the growth of small and medium-sized enterprises by:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Read the report](https://www.imf.org/en/Publications/CR/Issues/2019/02/12/The-Kingdom-of-the-Netherlands-Netherlands-2019-Article-IV-Consultation-Press-Release-Staff-46592)",
    "[Read the selected issues](https://www.imf.org/en/Publications/CR/Issues/2019/02/12/The-Kingdom-of-the-Netherlands-Netherlands-Selected-Issues-46593)",
    "[Read the press release](https://www.imf.org/en/News/Articles/2019/02/12/pr1936-kingdom-of-the-netherlands-imf-executive-board-concludes-2019-article-iv-consultation)",
    "[The Netherlands and IMF](https://www.imf.org/en/Countries/NLD)",
    "[Euro economic outlook](https://www.imf.org/en/News/Articles/2018/11/07/na181107-europe-economic-outlook-in-six-charts)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
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