The European Commission has significantly reduced its growth forecast for the Dutch economy. According to Brussels, the Netherlands suffers from the increased international uncertainty, which puts pressure on business investment. It is especially interesting information because Amsterdam was viewed by many analysts as the main European beneficiary of the coming Brexit.
Consumer confidence has also declined sharply in recent months and stagnation in new building plans has occurred.
In the new winter forecast of the committee, foreseen for 2019 and 2020, 1.7 percent are forecasted, after gross domestic product (GDP) growth of 2.5 percent in 2018. At the autumn estimate in November, Brussels still assumed 2 , 4 percent growth this year. The prognoses for 2018 and 2020 were then 2.8 percent and 1.8 percent respectively. The new forecasts are gloomier than those of the Netherlands Bureau for Economic Policy Analysis (CPB) in December.
The prospects for the eurozone as a whole also look less rosy. Estimates for Germany and Italy have been substantially revised. In Italy, which was experiencing difficulties, it was even about an adjustment from 1.2 percent to 201 percent in 2019. While the euro area counselors in November predicted milestones of 1.9 and 1.7 percent in 2019 and 2020, that is now only 1.3 and 1.6 percent.
Vice-President Valdis Dombrovskis from the committee says that especially the forecasts for the larger euro countries are now lower. This is largely due to external factors such as trade tensions and weakening economic growth in China. That there is still much unclear around the brexit, creates extra uncertainty.
For that matter, Brussels has already taken economic slowdown into account for some time, but according to the new estimates it will be much more severe than previously anticipated. According to European Commissioner Pierre Moscovici (Economic and Financial Affairs), the “economic foundations” of the European economy are still solid. He also still sees a lot of good news about employment.