16645000
Dutch (official)
AMSTERDAM (capital) 1.091 million; Rotterdam 993,000; The Hague (seat of government) 650,000 (2015)
- Conventional long form
- Kingdom of the Netherlands
- Conventional short form
- Netherlands
- Local long form
- Koninkrijk der Nederlanden
- Local short form
- Nederland
parliamentary constitutional monarchy; part of the Kingdom of the Netherlands
- Name
- Amsterdam
- Geographic coordinates
- 52 21 N, 4 55 E
- Time difference
- UTC+1 (6 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins last Sunday in March; ends last Sunday in October
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
The Netherlands, the sixth-largest economy in the European Union, plays an important role as a European transportation hub, with a persistently high trade surplus, stable industrial relations, and low unemployment. Industry focuses on food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs only 2% of the labor force but provides large surpluses for food-processing and underpins the country’s status as the world’s second largest agricultural exporter.
- Inflation
- 0.317%
- Total tax rate (% of commercial profits)
- 40.4%
- Real Interest Rate
- 0.202%
- Manufacturing, value added (% of GDP)
- 11.973%
- Current Account Balance
- US$ 64,754,485,415
- Labor Force, Total
- 9,025,921
- Employment in Agriculture
- 2.14%
- Employment in Industry
- 15.16%
- Employment in Services
- 74.94%
- Unemployment Rate
- 6.17%
- Imports of goods and services
- US$ 538,964,676,190
- Exports of goods and services
- US$ 622,913,847,692
- Total Merchandise Trade
- 139.21%
- FDI, net inflows
- US$ 80,802,662,949
- Commercial Service Exports
- US$ 145,307,487,376
vegetables, ornamentals, dairy, poultry and livestock products; propagation materials
agroindustries, metal and engineering products, electrical machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing
- Commodities
- machinery and transport equipment, chemicals, mineral fuels; food and livestock, manufactured goods
- Partners
- Germany 24.5%, Belgium 11.1%, UK 9.3%, France 8.4%, Italy 4.2% (2015)
- Commodities
- machinery and transport equipment, chemicals, fuels, foodstuffs, clothing
- Partners
- Germany 14.7%, China 14.5%, Belgium 8.2%, US 8.1%, UK 5.1% (2015)
- Country Risk Rating
- A2
- The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.
- Business Climate Rating
- A1
- The business environment is very good. Corporate financial information is available and reliable. Debt collection is efficient. Institutional quality is very good. Intercompany transactions run smoothly in environments rated A1.
- Port activity (Rotterdam, leading European port)
- Good competitiveness indicators
- Diversified exports and external accounts in surplus
- High quality infrastructure
- High levels of household savings: net financial assets = 200% of GDP
- Economy reliant on European economic cycle
- Exposure to UK risk
- Households and banks reliant on property market
- Concentration of wealth in housing and pension funds; lack of liquidity
- Aging population, high cost of healthcare
- High taxation of labor
Activity is expected to continue at a steady pace of growth. Despite the reappearance of inflation and the fact that 2016 tax cuts will not repeated, household consumption will continue to be the main economic driver, sustained both by continuing robust growth in private employment and disposable income. Unemployment will continue to fall, but less rapidly because of higher employment rates among older workers and the gradual integration of migrants. Long-term unemployment (25% of total unemployment, but 63% among those older than 45) will fall. Household confidence is expected to remain high, in line with the rising price of property, which forms a large part of net wealth. Thanks to this confidence and continued low interest rates, residential construction is likely to maintain its current momentum. These two parameters, on top of the increased capacity utilization ratio, should encourage businesses to increase their investment, even if the pace could be lower than in the past year because of the uncertainty generated by Brexit. Indeed, exports to the United Kingdom, a key market, are suffering from the depreciation of sterling. Added to the government's decision to cut the quantity of gas produced and exported because of earthquake risks, it explains the weak contribution of trade to growth. A large part of the recovery observed since 2014 is explained by the upturn in the property market, which is matched by very high household debt levels (215% of disposable income at the end of 2014) and fragility in growth. However, the number of business failures is expected to fall still further in 2017 (by 4% according to Coface, against 16% in 2016), but the floor seems to have been reached.
With exports of goods and services accounting for more than 80% of GDP, the Netherlands economy is very open with regard to trade and the country is among the top ten exporters in the world. It mainly supplies agrifood products (plants, flowers, dairy products, meat, fruit and vegetables), chemicals, medication, medical equipment, refined oil, IT and telephone equipment, natural gas, agricultural and construction machinery, electrical and electronic components, equipment for printing and the semi-conductor manufacture. However, half of these sales are re-exports, as the country acts as a hub for European trade. Although imports have risen faster than exports since 2015, due to the dynamism of internal demand and the sluggishness of world demand, the trade surplus will remain above 10% of GDP. Trade in services, together with transport, tourism, royalties and services to businesses, will remain in balance. The investment income balance, which is massive because of the weight of foreign investment in the country and of Dutch investments abroad, particularly from pension funds, will also be balanced. In contrast, transfers by foreign workers, international cooperation and contributions to the European budget will generate a deficit (2% of GDP). Finally, the current account surplus, although slightly smaller, will remain large. Thanks to recurrent current account surpluses, the country can post a net creditor position equivalent to 78% of GDP (to June 2016).
Fiscal consolidation has been underway for several years, with tighter measures in 2015 and 2016, specifically through cuts to welfare payments. The government balance is now in equilibrium. Excluding debt interest and the effects of the economic cycle, it shows a slight surplus. As a result, but also because of comfortable growth and the partial re-privatization of ABN AMRO and ASR, a sign of banking sector recovery, the debt burden is projected to continue to fall. Nevertheless, a larger than expected cut in gas production could slow this decline.
The broad coalition government, which since 2012 has been made up of the Social Democrats of the PvdA and the Liberals (VVD) of Prime Minister Mark Rutte, ends its current term on 15 March 2017 when the next parliamentary elections will be held to elect the 150 members of the Lower House (Tweede Kamer). In fact, following a number of defections, it no longer has a majority and needs to find occasional support from the eight other parties present in the Chamber. The December 2016 polls put out in front the Party for Freedom (PPV) led by Geert Wilders who is campaigning for the Netherlands to leave the European Union and/or the euro, for a refusal to accept migrants and for the non-ratification of a Europe Association Agreement with Ukraine, rejected by the population in a consultative referendum in April 2016. Even if he were to win, however much he wants to govern, he will be far from having a majority because of the fully proportional electoral system which favors multi-party system within Parliament. The support of the two left-wing parties (Socialist Party and the 50Plus Party), also eurosceptical but against withdrawing from the EU, will not be enough. In addition, the eurosceptics have few seats in the Upper House (the Senate or Eerste Kamer) which can reject any legislation and for which elections by indirect proportional representation in each province, are not due until 2019. In these circumstances, it is highly likely that Mark Rutte's VVD, a close second in the polls, will lead a new coalition which will go further than the Social Democrats who are likely to be punished for their participation in a government whose policy was focused on social security and pension reform.