Economy of the Netherlands

Economy of the Netherlands
Currency	Euro
Fiscal year	calendar year
Trade organisations	EU, WTO and OECD
Statistics
GDP	$832,160 billion (Nominal), $694.574 billion (PPP) (2011 est.)[1]
GDP growth	1,5% (2011 est.)[2]
GDP per capita	$41,949 (2011 est.)[3]
GDP by sector	agriculture: 1.9%; industry: 24.4%; services: 73.7% (2009 est.)
Inflation (CPI)	1.2% (2009 est.)
Population below poverty line	10.5% (2005 est.)
Gini index	30.9 (2007)
Labour force	8.33 million (2009 est.)
Labour force by occupation	agriculture: 2%; industry: 18%; services: 80% (2005 est.)
Unemployment	4.3% (Jan. 2011)[4]
Average gross salary	3,728 € / 5,035 $, monthly (2006)[5]
Average net salary	1,980 € / 2,673 $, monthly (2006)[6]
Main industries	agriculture-related industries, metal and engineering products, electronic machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing
Ease of Doing Business Rank	30th[7]
External
Exports	$397.6 billion (2009 est.)
Export goods	machinery and equipment, chemicals, fuels; foodstuffs
Main export partners	Germany 25.4%, Belgium 13.7%, France 8.9%, United Kingdom 8.8%, Italy 5.2% (2008)
Imports	$358.9 billion (2009 est.)
Import goods	machinery and transport equipment, chemicals, fuels, foodstuffs, clothing
Main import partners	Germany 16.6%, China 10.1%, Belgium 8.7%, United States 7.5%, United Kingdom 5.8%, Russia 5.4%, France 4.4% (2008)
FDI stock	$661 billion (31 December 2009 est.)
Gross external debt	$3.733 trillion (31 December 2009)
Public finances
Public debt	62.2% of GDP (2009 est.)
Revenues	$335.4 billion (2009 est.)
Expenses	$372.5 billion (2009 est.)
Economic aid	€ 4 bn (As of 2005[update])
Credit rating	Standard & Poor's:[8] AAA (Domestic) AAA (Foreign) AAA (T&C Assessment) Outlook: Stable[9] Moody's:[9] Aaa Outlook: Stable Fitch:[9] AAA Outlook: Stable
Foreign reserves	US$32.354 billion (April 2011)[10]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

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Dutch exports in 2006

On the Index of Economic Freedom, the Netherlands is the 13th most laissez-faire capitalist economy out of 157 surveyed countries. At the time of writing the Netherlands is the 16th largest economy of the world. (see: List of countries by GDP (nominal)) Between 1998 and 2000 annual economic growth (GDP) averaged nearly 4%, well above the European average. Growth slowed considerably in 2001-05 as part of the global economic slowdown. 2006 however, showed a promising 2.9% growth. Yearly growth accelerated to 4.2% in the third quarter of 2007. Inflation is 1.3% and is expected to stay low at about 1.5% in the coming years.

The Netherlands is a founding member of the European Union, the OECD and the World Trade Organization

Overview

The Netherlands has a prosperous and open economy, which depends heavily on foreign trade. The economy is noted for stable industrial relations, fairly low unemployment and inflation, a sizable current account surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanised agricultural sector employs no more than 2% of the labour force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The country is one of the leading European nations for attracting foreign direct investment.^[11]

The stern financial policy has been abandoned in 2009 on account of the current credit crises. The relatively large banking sector was partly nationalised and bailed out through government interventions. Employment rate is expected to drop slowly to 4%. A large deficit in government accounts of 3.7% is expected for 2011. The government wants to stimulate the economy by accelerating already planned projects. Fundamental reforms for long term recovery will be implemented as well.^{[citation needed]}

Government

While the private sector is the cornerstone of the Dutch economy, governments at different levels have a large part to play. Public spending, including social security transfer payments, is at 47.9% of GDP (2005). Total tax revenue was 37.5% of GDP (2005), which is below the EU average. In addition to its own spending, the government plays a significant role through the permit requirements and regulations pertaining to almost every aspect of economic activity. The government combines a rigorous and stable microeconomic policy with wide-ranging structural and regulatory reforms. The government has gradually reduced its role in the economy since the 1980s. Privatisation and deregulation is still continuing. With regards to social and economic policy, the government cooperates with its so called social partners (trade unions and employers' organizations). The three parties come together in the Social-Economic Council (‘Sociaal Economische Raad’), the main platform for social dialogue.

Trade and investment

The Netherlands, which derives more than two-thirds of GDP from merchandise trade, had strongly positive balance of payments for 2005 estimated at €31.5 billion. Leading export markets (2005) are Germany with 25.1%, Belgium with 12.2% and the United Kingdom and France with both 9.4%. Leading suppliers (2004) are Germany (17%), Belgium (9.4%), China (8.8%) and the United States (7.8%). As becomes clear from these figures, Germany is by far the most important trading partner of The Netherlands.

Leading foreign investors in the Netherlands (2005) are the United States with 18.5%, the United Kingdom (14.1%), Germany (12.0%) and Belgium (10.1%).

Sectors

Services account for more than half of the national income and are primarily in transportation, distribution, and logistics, and in financial areas, such as banking and insurance. Industrial activity, including mining, generates about 20% of the national product and is dominated by the metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 6% of GDP. Agriculture and fishing, although visible and traditional Dutch activities, account for just 2%.

Energy

While its oil reserves in the North Sea are of little importance, the Netherlands is presently the second largest natural gas producer in Europe and the ninth in the world, accounting for more than 30% of EU total annual gas production and about 2.7% of the annual world total. Proven natural gas reserves of the Netherlands are estimated (as of January 2005) at about 50-60 trillion cubic feet, or about 0.9% of the world total. Although the Netherlands owns substantial gas reserves in the North Sea, most of its production is presently from on-shore wells, and much of the natural gas produced by the Netherlands comes from Groningen Province, which borders the North Sea. Consumption of natural gas in the Netherlands is only about two-thirds of its production; the rest is exported and the Netherlands is presently the world's fifth largest natural gas exporter. Partly as a result of this large reserve of natural gas, nuclear power accounts for only 3.8% of the country’s electricity production.

Nuclear energy

Researchers in the Netherlands began studying nuclear energy in the 1930s and began construction of research reactor Dodewaard in 1955. Researchers’ goal was to introduce nuclear power technology by 1962 and replace fossil fuels. In 1968, a test nuclear reactor was attached to the power grid. This unit was shut down in 1997. In 1973, the Netherlands had its first commercial nuclear reactor Borssele operational. Currently, the country has one pressurised water reactor (PWR) with a capacity of net MWe 485, which produces 3.8% of the country’s electricity.^[12]

In the 1970s, the Dutch chose a policy that required reprocessing all spent nuclear fuel. In 1984, the government decided to create a long-term (100 years) storage facility for all intermediate and low-level radioactive waste and research strategies for ultimate disposal. In September 2003, the Central Organization for Radioactive Waste created an interim storage facility for high-level waste.^[12]

In 1994, the Dutch government agreed with the operator of Borssele that it would be closed down by 2003. This decision was fought by the employees of the plant, which pushed the closure date to 2013, and in 2005, the closure was postponed to 2033.

See also

• De Nederlandsche Bank (Central Bank of The Netherlands)
• Social-Economic Council (economic advisory council of the Dutch government)
• Polder Model (Dutch version of consensus policy in economics)
• Dutch disease
• VNO-NCW (Confederation of Netherlands Industry and Employers)
• Bureau for Economic Policy Analysis
• Ministry of Finance

Sources

• CBS - Statistics agency of the Netherlands
• CPB - Netherlands Bureau for Economic Policy Analysis
• DNB - Dutch central bank
• Eurostat - EU statistics agency
• CIA World Factbook
• Oil and gas infrastructure in the Netherlands

References

1. ^ List of countries by future GDP (PPP) estimates
2. ^ [1]
3. ^ [2]
4. ^ Euro area unemployment rate at 9.9% - Eurostat. 01. March 2011
5. ^ Wages and Taxes for the Average Joe in the EU 2
6. ^ Wages and Taxes for the Average Joe in the EU 2
7. ^ "Doing Business in Netherlands 2010". World Bank. http://www.doingbusiness.org/ExploreEconomies/?economyid=137. Retrieved 2010-08-20. 
8. ^ "Sovereigns rating list". Standard & Poor's. http://www.standardandpoors.com/ratings/sovereigns/ratings-list/en/eu/?subSectorCode=39. Retrieved 26 May 2011. 
9. ^ ^{a b c} Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. http://www.guardian.co.uk/news/datablog/2010/apr/30/credit-ratings-country-fitch-moodys-standard. Retrieved 31 May 2011. 
10. ^ "International Reserves and Foreign Currency Liquidity - NETHERLANDS". International Monetary Fund. 12 May 2011. http://www.imf.org/external/np/sta/ir/IRProcessWeb/data/nld/eng/curnld.htm. Retrieved 31 May 2011. 
11. ^ Source: CIA World Factbook (2008)
12. ^ ^{a b} “Nuclear Power in the Netherlands.” World Nuclear Association. March 2008. <http://www.world-nuclear.org/info/inf107.html>