A delegation from the fund conducted research on the Netherlands in recent days and today presented the first results. Experts believe that the Dutch economy will grow by 4.2% this year, but that growth will almost stop next year with a 0.6% increase. When the IMF released its global estimates in October, the Netherlands was still counting on growth of 4.5% and 0.8% respectively.
Since the Russian invasion of Ukraine, energy has become much more expensive and much more is spent on groceries at the supermarket. Overall, life costs 11.8% more this year, calculates the IMF. Due to government measures, inflation will drop significantly next year. But that doesn’t change the fact that the overall price level in 2023 is likely to rise another 4.2%.
incentive
The IMF points out again that while government support measures are mitigating the impact of high energy prices, capping energy prices also makes it more difficult to reduce inflation. This is because the price cap is not aimed at households and companies that really need help, but that every Dutchman actually benefits. For example, the government is driving consumption and this can drive prices up even more. It also reduces the incentive to save energy, the IMF said.
Real estate market
IMF researchers also draw attention to the cooling of the housing market. The recent drop in home prices may indicate that many homes in the Netherlands are indeed overvalued. If house prices suddenly fall more sharply, some families could run into problems. The IMF notes, however, that the large share of fixed-rate mortgages and long mortgage maturities provide some reassurance in this area. For most people, therefore, unpleasant situations will not immediately arise.