Growth base of the Dutch economy starting to broaden – ING

FXStreet (Barcelona) - Dimitry Fleming of ING, notes that with the Dutch growth rising 0.5% in Q4 2014 with an increase in consumption and investment, the outlook for 2015 growth has been boosted, with 2015 GDP expected to rise to 1.5% from previous 0.8%, on the back of strong domestic demand.

Key Quotes

“In Q4, GDP rose 0,5% compared to the previous quarter, with both domestic and foreign demand contributing positively for the first time since Q410.”

“Up till now, exports had been the main driver of growth, but investment has now taken over (+2.7%QoQ). Meanwhile, private consumption has also started to pick-up, rising for the third consecutive in a row. Underlying, both investment growth and consumption were fuelled by the reawakening of the housing market. The final quarter was particularly strong with existing home sales surging by 17%QoQ, boosting spending in DIY and electronic appliances.”

“Employment increased strongly, boding well for consumption growth going forward. The number of jobs was up 42.000 on the quarter and vacancies were up 6.000 – the sixth quarter of growth. Unemployment stabilized however, because of encouraged workers re-entering the labour market.”

“This year, GDP growth is expected to accelerate from 0.8% in 2014 to about 1.5%. Domestic demand is likely to become the main engine of growth.”

“Further job growth, a normalizing housing market and increased investment spending will lay the basis for this. “

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