The Dutch economy grew by 4.5% in 2022. In 2021 this was still 4.9%. The economy has never grown so fast for two years in a row this century. This is reported by Statistics Netherlands in the annual overview of the Dutch economy in 2022. “We have fallen back into our old model in our consumption model,” says BNR in-house economist Han de Jong.
De Jong sees “a huge change in 2022”. ‘In our consumption model we have gone back to our old model. Part of the service sector shut down due to the coronavirus and lockdowns, then we switched from consuming services to consuming goods. Came back again last year; the consumption of goods has decreased, but that of services has strongly increased».
“We’ve grown nearly ten percent in two years.”
How can consumers afford all this given the high inflation? According to De Jong, part of the answer is that we draw on our reserves. Most importantly, though, we’ve started working longer hours. “A considerable number of jobs have been added — four percent of that four and a half percent of economic growth comes from increasing the number of hours worked.”
Labor productivity
However, labor productivity does not grow. The numbers are difficult to interpret. You really have to look at it long term. What primarily helps labor productivity is when companies invest in better technology. The tools you have determine your productivity.’ Last year, labor productivity increased by just 0.6%, which is disappointing.
“The growth potential of the Dutch economy is limited.”
‘The growth potential of the Dutch economy is limited. Economists estimate that our growth potential is just over 1% a year. We have grown by almost ten percent in two years. We will not continue like this.’
However, compared to its neighboring countries, the Netherlands is doing well. “Maybe on balance the government gave more support so that we could build up financial reserves.”
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
