Netherlands Growth Prospects Remain Subdued

By Maarten van Tartwijk 

        AMSTERDAM--The Dutch Central Bank on Monday said the Netherlands is emerging from a lengthy economic crisis but that growth prospects are subdued as a result of a weakening global economy.
        The central bank said it expects Dutch gross domestic product to expand by 0.8% in 2014, up from a previous forecast of 0.2% in June, which would mark the first year of growth after two consecutive years of contraction. The revised forecast was driven by stronger-than-expected growth in the first quarter, it said in its biannual report on the Dutch economy.
        Growth in the eurozone's fifth-largest economy is expected to accelerate in the following years but at a slower pace than previously thought.
        The central bank said it now projects a growth rate of 1.2% in 2015, compared with 1.6% previously, and 1.5% in 2016, down from 1.6%. It blamed a weaker outlook for the global economy, which are expected to weigh on Dutch exports.
        Like elsewhere in the eurozone, inflation in the Netherlands is expected to remain low. The Dutch central bank lowered its 2014 forecast for consumer-price growth to 0.4% from 0.5% and in 2015 to 0.5% from 0.7%.
        The Netherlands has suffered from a so-called balance-sheet recession in which households, banks and the government seek to shore up their finances at the same time. This, combined with a drop in house prices, caused domestic consumption to plummet and unemployment to rise.
        The central bank said the Netherlands appears to be leaving the crisis behind, illustrated by improving consumer and business sentiment and a recovery of the housing market. Private consumption looks set to expand by 1.8% next year--the second-largest increase in 15 years, it said.
        Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
        (END) Dow Jones Newswires

        December 08, 2014 07:00 ET (12:00 GMT)

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