The Dutch economy 2013

10/09/2014 15:00

Today Statistics Netherlands publishes De Nederlandseeconomie2013. In this publication the economic structure of the Netherlands and its developments in 2013 are outlined in some detail. Also included are five background articles dealing with a variety of issues concerning specific recent developments in the Dutch economy.

The publication sketches 2013 as a mediocre year. The economy shrank by 0.7 percent and household consumption as well as investments decreased further. The number of jobs of employees fell sharply and unemployment reached an average of 8.3 percent of the labour force. The real disposable income fell by 0.9 percent. So the crisis that started in 2008 had not yet ended in 2013.

Still there were some signs of recovery, mainly in the second half of the year.Consumer confidence increased at a remarkable speed from August onwards. The housing market also shows signs of improvement. House sales went up as of July. The dip in the housing market was one of the major reasons why the crisis continued for so long in the Netherlands, whereas many other countries in North WestEurope have been on the road to recovery for quite a while.

The background articles in the publication deal with the materials dependencyof the Dutch economy, illegal activities, investments, the distribution of income between households and enterprises and government finance.

The Dutch economy is heavily dependent on imported materials
The Netherlands has relatively few natural resources of its own, whereas the economyrelies greatly on exports and sectors using a great deal of energy and materials. All metal used is imported. And despite the natural gas reserves, most of the fossil fuels consumed in the Netherlands are also imported. Dutch per capita material consumption is relatively low compared to other European countries though. This is mainly related to the great population density.

The share of illegal activities within the Dutch economy at 0.4 percent
The share of illegal activities within the Dutch economy in 2010 is estimated at 0.4 percent. Within the illegal economy, the largest sector is the cannabissector with a shareof around 40 percent, followed by prostitution (20 percent) and harddrugs (15 percent). According to an agreement within the EU, illegal activities have to be included in the system of economic statistics, the national accounts, as of September 2014. However, it is much more difficult to make reliable estimates for illegal activities than it is for legal activities.

Investment nosedive in the Netherlands since 2008
A frequently heard remark is that Dutch investments lag behind because enterprises hang on to their income. The crisis made deep cuts in investments, especially in real estate, in recent years. It is also true that (non-financial) enterprises increasingly invest more abroad, relatively speaking. The foreign activities form an increasingly important source of income for enterprises. When foreign investments are taken into account, it turns out that Dutch enterprises are certainly not hoarding their profits.
A brief was published about this on 10 September.

Share of enterprises in national income up, household share down
The national income is earned by the various sectors within the Dutch economy.The share of enterprises within the disposable income has increased over the last thirteen years, whereas the share of households decreased. One of the causes for this are the taxes paid, which rose for households but fell for enterprises.
A brief was published about this on 9 September, with a summary.

Without interest charges still budget deficit
Although the Dutch government debt has increased strongly in recent years, the interest chargesdiminished. In comparison to other Europeancountries, the Dutch government pays relatively little interest. This is one reason why the Netherlands met the three percent norm in 2013. However other indicators of the health of the Dutch government finances paint a less rosy picture of the situation. Without the interest charges,theNetherlands still has a budget deficit, in contrast to Italy for example.