Dutch economy to grow over 1.5 pct in 2015, 2016; lags behind EU

The Dutch economy is expected to grow by 1.6 percent and 1.7 percent in 2015 and 2016, respectively, the European Commission revealed on Tuesday. This growth estimate is below the predicted Euro Area and European Union averages and also below the Dutch forecasts presented earlier by ING. The European economy is currently benefitting from a range of factors, according to the EC. Among those are low oil price, stable global growth, continuing depreciation of the Euro and growth-supporting policies of the EU. On the monetary side, quantitative easing by the European Central Bank contributes to lower interest rates and expectations of improving credit conditions. Fiscal policy in most EU states is remaining neutral – neither expansionary nor tightening. Real GDP is thus expected to rise in 2015 by 1.8% in the EU and 1.5% in the Eurozone. For 2016, the expectations are 2.1% and 1.9% respectively. Economic growth is predicted to be uneven across different European countries. The main beneficiaries of the quantitative easing will be countries with a relatively tighter current fiscal stance. In some states, lower capital buffers and higher level of non-performing loans is expected to hinder growth. Favorable economic conditions also positively influence the labor market in the EU. The employment level in the Netherlands is expected to rise by 0.9% and 1% respectively, which is around the European average. The unemployment level is forecast to fall from 11% to 9.6% over this year, as improvement spreads across different sectors. With steady growth predicted for 2016, the trend is expected to continue. In 2016, unemployment is expected at 9.2% in the EU and 10.5% in the Eurozone. Developed countries lagging behind the EU average is in part explained by higher level of growth in countries whose economies do not year operate at their full potential.