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'Dutch consumer spending very weak compared with eurozone'

Thursday 08 March 2012

For the past 10 years, Dutch public consumption has been weaker than in other eurozone countries and this is one of the main reasons why the country is now in recession, the central bank said in a new report on Thursday.

Public spending is now lower than it was during the serious economic crisis of the early 1980s, the central bank said.

Between 1992 and 2001, the Dutch were big spenders in eurozone terms. The central bank says the turnaround is partly due to job market developments compared with the rest of Europe. After enjoying good pay rises in the 1990s, between 2001 and 2011, earnings fell 0.7% in real terms.

Housing market

In addition, the sharp rise in pension premiums since the beginning of this century have also depressed spending power, the central bank said.

Problems on the housing market have also made the situation worse. House prices doubled between 1995 and 2001 but are now falling.

'Many people used the excess value in their property to take out new loans which they used to buy goods and services,' the central bank said. But many people now own property which is worth less than their mortgage.

© DutchNews.nl


Readers' Comments

'Dutch were big spenders in eurozone terms' That was then, this is now.
The term ‘REAP WHAT YOU SOW ‘ might fit the bill as the Dutch are becoming irresponsible in their spending habits. Their EU neighbors Greece, Portugal and Italy did the same.Now they beg for bailouts to pay their civil servants. 2012 will be no better since countries don’t follow any strict spending regulations. Austerity measures can only go so far on the working class. Seems Dutch households need to become more diligent of their spending. Easy credit only creates more problems when economies slow down and unemployment goes up.

By Dave | 8 March 2012 2:04 PM

Dutch have been known to have the highest levels of household debts exceeding well above their disposable income. Now they are forced to reduce their outstanding debts - less household spending which in return means slower growth for their country. Simple economics 101.

By JT | 8 March 2012 2:10 PM

The people need money in the pocket to boost the economy.It seems everyone knows this but the power's that be.

By jason buttle | 8 March 2012 2:13 PM

'Dutch were big spenders' - The new term realized by many Dutch big spenders is 'living within their means' Doesn't necessarily help the Dutch economy grow but big spenders finally realize that money makes the world go round and if they don't have the disposable income, they can't keep spending frivolously without repercussions. Either way the GDP of countries suffer. GDP = private consumption + gross investment + government spending + (exports − imports) Basic math C+I=G=(X-M)

By elaine | 8 March 2012 2:24 PM

Reality sometimes catches up with the big spenders during a recession. The housing problems are no different than those faced in the US where thousands of families own property worth less than their mortgage. That's not even including the outstanding university and credit card debts owed by many now facing foreclosures and bankruptcy.

By Karen | 8 March 2012 2:35 PM

everything here is low in quality, cut in size, and taxed heavily. no wonder no one buys in here.

By dork | 8 March 2012 2:37 PM

Pick one service or item, fix its features, find a merchand or provider in NL, US, UK, and DE; compare their prices.

NL is always no.1 in price.

By dork | 8 March 2012 2:51 PM

What do they expect? House prices falling (i.e. equity disappearing), salaries frozen or reduced, high taxes, high unemployment, a country in recession, a government that wants foreigners to leave, nothing but 'doom and gloom' in the news. I know, let's all go out and spend!!

By Anton | 8 March 2012 4:31 PM

It's the reason? It could be a symptom for a recession. When people feel financial strain they spend less

Good articles on www.ariespost.com

By David | 9 March 2012 5:46 AM

'House prices doubled between 1995 and 2001 but are now falling.' - no surprises here. What goes up quickly comes down even quicker. This is the clear difference between speculation (quick dirty unsustainable profit) and moderate sustainable financial growth. In the later case, prices do not double in a few short years; they climb slowly and, in a balanced economy, just above the rate of inflation. There are no 'short cuts' nor is any type of magical thinking ever going to change this simple fundamental fact.
The rest of this article clearly points to the implementation of the EURO as (negative) turning point for the Dutch economy.

By Bill | 9 March 2012 6:09 AM

Personally, I came to NL plenty of energy, illusionos and willing to contribute. What I've found is racialism, rip-offs everywhere and certainly, in couple of months I will go back to the UK which, far from being the paradise (especially nowadays), at least you do not have to deal, in your everyday basis, with 2 nazis out of 3 people you come across...

By Pepe | 9 March 2012 8:02 AM

@Pepe: Is exactly what it looks the Dutch are trying to achieve - weeding out the foreigners thinking they will choose to leave themselves. If not - then they will make their lives more difficult with new regulations that affect mostly foreigners.

By jan | 12 March 2012 12:19 PM

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