Surprise Pick Up In Dutch GDP
Business Confidence in the Netherlands has taken a surprise dip in the face of better than expected GDP growth figures. The September Business Confidence number has been announced as an unexpected negative -0.2, this follows a year where the data was predominantly positive and until recently very expansionary, last month’s reading of 0.0 appeared to be the bottom of what looked like a short term decline in business sentiment.
Despite the deteriorating confidence in the commercial sector, there was some welcome positive news from the Eurozone’s fifth largest economy this morning in the form of an upward revision to the second quarter GDP data. The final Q2 GDP data is showing that the economy of the Netherlands expanded by 0.7% during the quarter, this is a healthy reversal of the -0.4% contraction experienced during Q1 of this year and clearly beat the 0.5% target the market had settled on. The economy also expanded 1.1% over the same quarter last year, this represents a strong pick up from the 0.0% equivalent metric experienced after the first quarter, the consensus here was that this would only come in at 0.9% expansion.
The Dutch recovery is finally beginning to gather pace and if it’s current growth trajectory continues unabated then it will be challenging for the position of the top growth spot among core Eurozone economies. The official growth predictions are already out-dated given today’s GDP readings, the current expectation is for the economy to experience full year expansion of 0.75% and 1.25% in 2014 and 2015 respectively, these however will likely be revised upward as the economic turnaround continues to increase momentum.
The government will be, for the first time in six years, looking forward to delivering some good news in the upcoming national budget. In a pre budget address the King has announced that instead of social cuts this year there will instead be taxation cuts. This renders the fall in Business Confidence today all the more surprising.
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