Economic growth in the Netherlands is set to subside to its slowest pace since 2013 in the next two years, as weakening international trade offsets strong domestic demand, the Dutch central bank said on Monday.
Growth in the euro zone’s fifth-largest economy is expected to drop to 1.4 percent next year and 1.1 percent in 2021, the central bank said, trimming its June forecast for an expansion of 1.5 percent and 1.4 percent respectively. Growth is expected to fall from 2.5 percent to 1.7 percent this year.
Unemployment is expected to remain at historically low levels, boosting wage growth and consumers pending, while making it harder for companies to attract new staff.
Meanwhile, increasing trade tensions will weaken exports, the central bank said, as growth of international trade is expected to be cut in half to less than 2 percent.
A no-deal Brexit remains the largest threat to the Dutch economy, the bank said, cutting off half the economic growth now expected for the next two years.
Inflation is expected to reach the desired level of around 2 percent by 2021, the central bank said, while government debt is expected to fall to the “comfortable level” of 45 percent of gross domestic product in the next two years.
Weaker trade to slow Dutch economic growth to 1.1 pct in 2021: cenbank