Netherlands: Demand recovers
The economy continues to recover, with GDP growth rising to 3% in 2006. Exports are benefiting from strong world demand and improving competitiveness. Domestic demand is finally picking up as private consumption is underpinned by a stronger labour market. Inflation is low, but core inflation is expected to pick up gradually along with higher wage growth.
The fiscal position has considerably improved, but could be further strengthened by phasing out mortgage-interest subsidies, helping to soften strong demand pressures in the housing market. Moreover, further measures should be taken to increase the labour force participation rate of disabled workers, which shows no improvement.
|Population (000s), 2005||16 320|
|Area (000 sq km)||41|
|GDP (Billion USD), 2005||558.1|
|Life expectancy at birth (Women, Men), 2004 ||81.4, 76.9|
|Total labour force (000s), 2005||8 345|
|Government type||Constitutional Monarchy|
|Indicators||% change unless otherwise indicated|
|Household savings ratio||7.0||6.0||4.9|
|Consumer price index||1.5||1.0||1.9|
|Unemployment rate (%)||4.9||4.2||3.1|
|General government financial balance|
|Current account balance (% GDP)||7.4||7.7||9.3|
No. 258/259, December 2006