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Tuesday, 13 September 2011

Macro-Economic Outlook for The Netherlands 2012

In The Netherlands, there is the longstanding tradition that the third Tuesday in September is celebrated as “Prinsjesdag” (i.e. Day of the Princes): this day stands for the official opening of the new parlementary year.

It’s a day with many traditions, like the royal coach ride from palace Noordeinde (the ‘working palace’ of Queen Beatrix) to the Second Chamber of Parliament and the Queen’s speech to a parliament, celebratory dressed in tuxedo’s and extravagant hats for the ladies in the parliament.

On this day, traditionally the “Rijksbegroting” or State-budget for the following year is presented by the Finance Minister, in this case Jan-Kees de Jager. This Rijksbegroting is not only a summary of dry figures on the state budget, but it also contains a vision of the Dutch Central Planning Bureau ( on the Dutch economy for the following year: the Macro-Economic Outlook.

Yet, there is another growing tradition concerning Prinsjesdag: the fact that some of the main data, published under embargo and officially to be presented in the Queen’s speech, are previously leaked to the news editors of commercial tv-broadcaster RTL (

Their political anchorman Frits Wester, is a former political heavyweight with a large network in The Hague and he and his people have pulled off this stunt for the last 5 years.

And they did again in 2011, by acquiring the Macro-Economic Outlook 2012 (in Dutch MEV) and putting the main conclusions on internet (sadly not the integral report).

As the purpose of my website is to bring you news on the Dutch economy and beyond, it is good to take a look at the main conclusions of this Macro-Economic Outlook 2012, as presented by RTL Nieuws:

Dutch Economy further deteriorates (link in Dutch)
Hard economic times are awaiting the Dutch Economy. This turns out of the leaked figures that are in hands of RTL Nieuws: the so-called Macro-Economic Outlook 2012.

The Dutch economy will only grow by 1% for the next year. In June, the Central Planning Bureau expected still a growth of 1.75% for 2012, but this outlook was adjusted negatively. The purchasing power of the Dutch households will decrease by 1%, a slight improvement compared to the -1.25% that was expected in June. The inflation will be slightly lower than expected with 2% (was 2.25 in June).
All figures combined
 economic growth> 1% (June forecast 1.75%)
 inflation > 2% (June forecast 2.25%)
 Purchasing power > -1% (June forecast -1.25%)
 Unemployment> 4.25 % (June forecast 4%)
 EMU Balance > -2.9 % (June forecast -2.2%)

The reaction of political anchorman Frits Wester of RTL News
This macro-economic outlook requests for appropriate, decisive measures by the Dutch Cabinet. The total view is not good.

The unemployment is higher than expected with 4.25%. The Dutch budget deficit remains only by a whisker under the 3%, demanded of the European Stability Pact: 2.9%

Although the figures of the Central Planning Bureau could be considered ‘bad news’ for the Dutch economy, I suspect that they’re still overly optimistic.
It took only three months to reduce the economic growth figure to 1% from 1.75%: this is 0.75% difference, almost as much as total predicted growth for 2012. And in only three months, the forecasted budget deficit rose to 2.9% from 2.2%. And to be honest: I don’t buy the unemployment figures of only 4.25% for the next year:
  • It is almost certain that there will be a recession in The Netherlands in 2012 and it might be a big one
  • The whole financial industry (banks pension funds and insurers) suffers from the enduring uncertainty on the Euro-zone and the falling stock rates that are a consequence of this. As these factors limit the financial industry’s capabilities to do investments, I suspected that unemployment in the financial industry might rise strongly:
  • The building and construction industry will certainly suffer from a shakeout after years and years of excess building, concerning Commercial and Residential Real Estate. The writing is already at the wall. This will also have a devastating effect for the large numbers of freelance professionals (ZZP’ers) that are earning their money in this industry.
  • The manufacturing industry and agricultural industry will also suffer from the coming recession, especially as the enduring problems in the Peripheral Euro-countries will probably lead to diminished exports of goods. What is the use of exporting goods, when the purchasing country can’t pay for it.
It is my prediction that The Netherlands might hit a kind of perfect economic storm; the storm that I thought, would already take place in 2009.
Now it seems that this storm was postponed, but not discarded and I suspect it will hit the Euro-zone and especially The Netherlands at full force in 2012.

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