Netherlands Economic Stimulus Package

By: EconomyWatch   Date: 30 June 2010

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Netherlands economic stimulus package was announced by their Prime Minister Jan Peter Balkenende in November 2008. This Dutch economic stimulus package of €6 billion equals one percent of this country’s gross domestic product. Economic stimulus package for Netherlands primarily includes fiscal measures directed at improving corporate liquidity.

This said economic stimulus package of Netherlands of $7.5 billion has been drawn up in agreement with joint regional economic plan of European Union. Global financial crisis has forced Dutch government to nationalize two major banks ABN Amro, and Fortis in order to prevent them from collapsing triggered by delinquent funding. In addition, this economic stimulus package in Netherlands also included € 20 billion, which was injected into Dutch money market to guarantee interbank transfers and thereby restore confidence of investors and consumers. Aegon, an insurance company, received a sum of €3 billion as a part of economic stimulus package to Netherlands. ING, a commercial bank, has received €10 billion as booster funds. Inflation has been projected at 1.8 percent in 2009 and at 1.4 percent in 2010. GDP is expected to grow at 1.8 percent in 2009. This low growth rate is a reflection of consumers’ and business’ pessimism.

Lower growth in exports and high commodity prices led to a fall in GDP growth from 3.5 percent in 2007 to 2 percent in 2008 and 0.6 percent in 2010. GDP calculated on basis of purchasing power parity (ppp) worked out to $687.5 billion in 2008. This estimate in terms of official exchange rate amounts to $909.5 billion. Per capita GDP calculated on ppp basis for corresponding period was estimated at $41,300. Nearly 74 percent of GDP was contributed by services or tertiary sector, followed by over 24 percent contribution from secondary or industrial sector and remaining 2 percent contribution came from primary or agricultural sector. Investments in Netherlands, as per estimates of 2008 data, accounted for 20.3 percent of GDP, while public debt worked out to 57.3 percent of GDP in corresponding time.

National budget of Holland for 2008 recorded revenue of $408.5 billion and an expenditure of almost $399 billion. Exports comprising mainly of chemicals, foodstuff, machineries and equipments, and fuels amounted to $573.5 billion compared to its import of $485 billion for 2008. Holland economic stimulus package has made provisions for foreign direct investments. In 2008 this was worth $730 billion. Dutch exchequer has a gold and foreign exchange reserve of $27 billion approximately.



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