(Adds quotes from central banker, details on government
By Bart H. Meijer
AMSTERDAM, June 12 The Dutch central bank on
Monday raised its 2017 forecast for economic growth in the
Netherlands to 2.5 percent, saying strong international trade
and corporate investments will bring the strongest expansion in
The DNB in January had forecast 2.3 percent growth for this
"Things are going very well at the moment," DNB director Job
Swank told journalists. "Although our economy remains dependent
on sometimes turbulent developments elsewhere, optimism
The fifth-largest economy in the euro zone will maintain
"strong momentum" in the coming years, but a slowing of world
trade and the housing market in the Netherlands will ease the
pace of expansion to around 2 percent in 2018 and 2019, it said.
Unemployment in the Netherlands, one of the top economic
performers in the euro zone, will drop to its lowest level since
2010 this year at 5 percent and will continue declining in the
coming years, putting upward pressure on wages.
Higher income and rising house prices will further stimulate
consumer spending, while inflation will remain modest, with
projected rates of just over 1 percent until 2019.
Investments by companies, meanwhile, will reach the highest
level in 40 years, measured as a share of GDP, helped by profit
growth and easing financial constraints.
The strong economy will also strengthen government finances,
with the budget surplus estimated to reach 1.1 percent of GDP in
2019, up from 0.4 percent in 2016.
Swank called this a "healthy buffer" that will help the next
Dutch government. "With a surplus of around 1 percent you don't
have to hit the brakes so hard during bad times," he said.
After nearly three months of negotiations, the main Dutch
political parties have yet to form a coalition government.
Although domestic spending has played a significant part in
the recovery of the Dutch economy after the financial crisis,
exports will contribute almost half of total GDP growth in 2017.
The DNB warned that a rising wave of trade protectionism
globally could pose a serious threat to the relatively small and
open economy of the Netherlands.
Trade restrictions imposed by the United States and other
countries could potentially reduce Dutch economic growth to
slightly above 1.5 percent in 2018-2019, it said.
(Editing by Anthony Deutsch and Hugh Lawson)