The Dutch economy was more resilient than the average Euro area economy in 2020 owing in part to a high rate of digitalization of activities that allowed a large share of the work force to work remotely, while the strong policy response mitigated the impact of containment measures. A strong recovery is underway, with pre-pandemic GDP level to be exceeded in 2021:Q4, and the labor market has tightened considerably. The economy is forecast to grow by 4.0 percent in 2021 and 3.3 percent in 2022, on the back of strong consumption and investment, supported by increasing coverage of vaccines. Near-term risks to the outlook are roughly balanced, driven by the uncertain trajectory of the pandemic on the downside, while a fuller than expected drawdown of savings accumulated in the pandemic would further support domestic demand and growth. Further out, real estate market developments present additional risks.

The Dutch economy was more resilient than its peers during and after the pandemic. Reflecting the prevalence of telecommuting and strong fiscal support, the economy experienced a less severe recession followed by a more robust recovery than in the rest of the euro area, with no scarring expected. The labor market is tight with a low unemployment rate and high vacancies, although wage growth has so far been moderate. After hitting a record high in September, consumer price inflation eased to 11 percent in December driven by lower energy prices, while core inflation increased to 8.4 percent y/y. The economy appears to be overheating. The war in Ukraine is posing new challenges albeit the terms of trade shock has been smaller than for the rest of the euro area.

This paper presents the overview of the Dutch economy. After a double-dip recession that ended in early 2014, a strengthening but moderate recovery led by exports and investment is underway, although lower production and exports of natural reduced gas reduced growth in the second quarter of 2015, without however interrupting its momentum. Unemployment is falling slowly and inflation is low, but positive. Credit has continued to decline, but demand for credit is gradually rebounding. The Dutch banking system is emerging from its restructuring. The economy now appears set on a gradual path of recovery, and growth is expected to reach 1.9 percent this year and in 2015, supported by an improving domestic demand.

This 2018 Article IV Consultation highlights that the Netherland’s economic recovery has taken hold. Real growth is forecast to reach 3.1 percent in 2018 owing to robust domestic demand. Private consumption has been supported by rising disposable income and positive wealth effects from increasing housing prices. Net exports have proven resilient to global uncertainties, pushing up the already large current account surplus. Unemployment has continued to decline rapidly, although most of the jobs have been created under temporary contracts or self-employment status. The economy is expected to keep its momentum in the coming years. Domestic consumption and investment are forecast to remain the main drivers of growth, prompting a gradual decline of the current account surplus.

The UK’s rapid vaccination campaign enabled it to start to reopen the economy in the Spring of 2021. With highly accommodative policies, the recovery has been faster than expected. However, capacity constraints and rising price pressures have emerged while new Covid-19 variants have raised new uncertainties. The government has allowed all initial pandemic support programs to sunset but has loosened near-term fiscal policy while specifying a back-loaded medium-term consolidation plan. With continued above-target inflation readings, the BoE made a first move to raise the policy rate in December. Macroprudential policies are returning to more standard risk settings. The near-term growth outlook remains strong, but so too are price pressures, while the financial cycle remains ahead of the economic cycle. The pandemic and Brexit have magnified structural challenges. Real GDP would remain below its pre-pandemic trend by about 2–21⁄4 percent in the medium term. Risks are considerable in the period ahead, centering on new Covid-19 waves and spillovers from tensions in Eastern Europe.

Labour markets across the Netherlands recovered quickly from the COVID-19 shock and Dutch cities are now facing an unprecedented level of labour market tightness. The high demand for workers presents a unique opportunity for Dutch municipalities to find pathways into employment for those with the lowest labour market attachment and alleviate the pressure faced by local employers that struggle to find suitable workers.

This Article IV Consultation highlights that the Dutch economy has grown faster than the euro area average over the past few years reflecting recovering consumption and investment, and strong net exports. Progress with tackling long-standing imbalances in the households and corporate sectors, and thus external imbalances, has lagged. Households remain highly leveraged and their consumption constrained by a stagnating disposable income. In the corporate sector, dominated by large multinational corporations, investment is low but savings are high, and developments are diverging with domestic small and medium enterprises relatively stagnant. Strong fiscal performance in recent years has boosted buffers that can now be used to reduce distortions and strengthen potential growth. The report recommends that it is important to harmonize tax benefits and social security contributions for different types of employment to reduce labor market duality while increasing overall labor market flexibility. Using fiscal space to address household and corporate imbalances is desirable and is unlikely to jeopardize long-term fiscal sustainability.

Ongoing conduct issues in the banking sector have sparked global discussions on the effectiveness of the corporate governance of these institutions. This dissertation commences by exploring the internationally evolving regulatory landscape of prudential corporate governance and the role of bank senior management within these frameworks using a law and economics perspective. Two model jurisdictions, the United Kingdom and the Netherlands, are identified as pioneers with their emerging approaches to tackle the persisting challenges. Against this backdrop, the study turns to Switzerland. It fills the gap of a comprehensive supervisory law analysis of bank senior management. For this purpose, the fragmented provisions are distilled from their institutional embedding and structured along the supervisory law life cycle of authorisation, ongoing supervision and enforcement. Along each phase, the respective novel approaches from the model jurisdictions are presented. Through these analyses, the dissertation identifies gaps and inefficiencies in the Swiss supervisory law framework. These findings are synthesised in order to gain a holistic view of the current setup. Concluding, future pathways for Switzerland are presented, also inspired by international developments, to propose a more structured, robust and efficient framework for the regulatory oversight of the senior management of Swiss banks.

This 2019 Article IV Consultation focuses on Curaçao and Sint Maarten’s near and medium-term challenges and policy priorities and was prepared before coronavirus disease 2019 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets. The fiscal position in Curaçao improved in the past two years, in part due to implemented fiscal measures. Both Curaçao and Sint Maarten would benefit from introducing a Fiscal Responsibility Framework. It could incorporate a central government debt ratio as a long-term anchor and operational rules calibrated to meet it. The report suggests that risks in the financial sector need to be addressed as a matter of priority. The authorities should develop a strategy for addressing financial sector vulnerabilities with the objective of preserving financial stability while minimizing fiscal costs. Significant strengthening of supervision and a complete overhaul of the bank resolution framework are also urgently needed. An across-the board improvement in the governance framework should be a key priority in both countries. Vulnerabilities in the financial system point to the need to strengthen governance in the financial sector.

The economic impact of the pandemic has been much milder than initially foreseen, still the outlook remains challenging. The economy, dominated by financial services, adapted quickly to telework and benefited from unprecedented policy support, both domestically and globally. Uncertainty is unusually high, dominated by the virus dynamics in the short term, with downside risks relating to a sharp rise in global risk premia, deglobalization trends, and changes in international taxation.