• The economy of the Netherlands witnessed moderate growth in 2019, post gains of 2.6% in 2018. A key driver for this growth is the growth of exports, which accounts for around two-thirds of GDP. Fixed investment, i.e. investment into the accumulation of new fixed capital was also an essential driver of economic growth in 2019, leading to increased investment revenue and boosting GDP. The strength of the labour market positively supported consumption, with real value private final consumption growing steadily, after gains of 2.3% in 2018.
• The Manufacturing sector, which is dominated by industries such as engineering, vehicle manufacture, electrical and electronic products, chemicals, aerospace and petrochemicals, accounted for 13.0% of the GDP and employed 11.2% of the workforce in 2018.
• Despite the Netherlands being one of the biggest markets for exports in horticulture, in 2018, the agricultural sector employed only 2.3% of the workforce. Yet, farms in the Netherlands are larger than in most Western European countries. Farms are efficient, and farmers benefit from the low-lying and well-irrigated character of the landscape.

Socio-economic data

Top 3 cities of Netherlands

Source: Euromonitor International from national statistics/UN

• GDP growth in the Netherlands is expected to be slow, dipping to 1.5% in 2020 and declining further to about 1.3% per year by 2026 due to trade disputes and Brexit uncertainty weighing on global activity and a dent in demand for European goods. However, the domestic economy is anticipated to remain resilient due to a tight labour market increasing job demand and expansionary fiscal policies that are foreseen to moderate the slowdown to some extent.
• The Netherlands government is expected to make significant changes to the tax system. One of these significant changes is the unification of most VAT rates. The government also introduced several measures such as the abolition of tax on company dividends for foreign investors and the increase in the statutory retirement age to boost both short term and long-term performance of the economy.
• Unemployment has seen improvement in 2019 with the proportion of permanent employees increasing for the first time in a decade. This improvement is partially due to the tightness in the labour market, done in a likely attempt to avoid repeating the staff shortage that occurred in 2018. However, unemployment is expected to rise gradually, with business investment projected to soften, reflecting the worsening trade environment.