Disposable income rise leads to minor improvement in Dutch economy in 2023

Disposable income rise leads to minor improvement in Dutch economy in 2023

The Netherlands’ GDP exceeded analysts’ expectations in the final quarter of last year, growing by 0.4% in the three months to December 2023. This growth reversed a three-quarter period of contraction and surpassed market predictions of 0.3%. The increase in GDP was driven by a strong rebound in household consumption (1.9% against -0.2% in Q3) and increased government spending (0.7% against 1.3%).

The news of the GDP growth will be welcomed by the government and Dutch households, as it follows a three-quarter period of economic contraction that began at the start of the previous year. While the GDP was down 0.4% compared to 2022 due to the recession that affected the Netherlands in the first nine months of the year, this figure was revised down from an initial estimate of 0.5%.

Statistics Netherlands also reported that in 2023, real household disposable income rose by 1.4% compared to the previous year, driven by higher wages resulting from increased collective bargaining. Both employees and self-employed individuals experienced an increase in income compared to 2022. Employee compensation grew by 7.7%, with a 1.3% rise in the number of employee jobs and a 6.0% increase in collective pay. Self-employment income, especially in industries like hospitality, specialized business services, real estate rental, trade, and agriculture, saw an 8.7% increase.

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