Economic Affairs
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4. Information for Bangladeshi Companies

4.1 Economic Background Information - the Netherlands7

The structure of the Dutch economy is characterised by openness and outward-looking orientation. Because of its favourable location and its well-organized logistics infrastructure, the Netherlands has played a central part in international trade for centuries.


Dutch economic growth was 1.1 percent in 2005, down from 1.7 percent in 2004. The forecasts for economic growth are, however, somewhat more positive an expected average growth of 1.75% in 2008-2010. The main contribution to GDP growth has been exports of goods and services, which grew by 5.9 percent in 2005. This increase was mainly caused by re-exports, i.e. exports of goods produced abroad which are redistributed by the Netherlands after little or no further processing. After exports, fixed capital formation is the next largest contributor to economic growth. Investment spending rose by 2.2 percent in 2005, continuing its slight recovery.


The volume of goods imported and exported continued to rise in 2005. As in 2004, in 2005 trade with countries outside the European Union rose by more than trade with the EU countries. Nevertheless, when looking at the share of the European Union in total Dutch import and export it is evident that the EU is still by and far the most important trade partner of the Netherlands (import 62 percent and export 83 percent). However, the single most important trading partner of the Netherlands has become Asia, with the share of imports from Asia at 23 percent and the share of export to Asia at 7 percent (similar to export to America). Trade links between the Netherlands and Bangladesh are still modest, however, with the advantage clearly on the Bangladeshi side (Dutch trade deficit with Bangladesh is EUR 189.5 million in 2005.)


Table 5 Key economic figures the Netherlands






GDP (market prices) % volume change




Consumer price index % change




Total exports mln Euro




Exports to Bangladesh

mln Euro

share of total Dutch exports








Total imports mln Euro




Imports from Bangladesh

mln Euro

share of total Dutch imports








Government fiscal balance  (in % GDP)





Inflation has been relatively low the last couple of years and currently (mid-2006) hovers below 2%. Consumer prices were on average 1.7 percent higher in 2005 than in 2004. Although significantly higher than in 2004, when it was 1.2 percent, the level measured in 2005 is still low. Both consumer prices and prices in manufacturing have been pushed up by the rise in oil prices. Factory gate prices in the manufacturing industry were on average 6.2 percent higher in 2005 than in 2004. Prices of intermediate consumption raw materials and semi manufactured goods used in the manufacturing industry were on average 10.2 percent higher in 2005 than in 2004.


Government net spending has been in lines with the EMU conditions (deficit max. 3% of GDP). Revenues from national government taxes have risen during the last years. As company profits went up, so did government revenues from corporate and dividend taxes. Revenues from wage taxes, however, dropped sharply as a result of the governments wage restraint policy combined with higher pension premiums and lower employment levels. At the same time, government spending has declined, particularly on social provisions such as old age pensions.


When looking at the value added by type of industry, the biggest contributor to GDP in the Netherlands is financial and business activities. A breakdown of the total value added in 2005 gives the following picture:


From this breakdown it becomes evident that the Netherlands is first and foremost a service oriented economy, while industry and in particular agriculture have become relatively less important during the last decades.



Other useful web addresses for economic background information on the Netherlands

The website of the International Monetary Fund (IMF) provides in its Article IV consultation information on the macroeconomic performance of the Netherlands.

The website of the Organisation for Economic Co-operation and Development (OECD) offers update information on the Dutch economy: Economic Survey of the Netherlands 2005.

The website of the Dutch Central Bank (DNB) provides monetary and trade statistics (national accounts) and economic background papers on selected topics.

7 Statistical Yearbook of the Netherlands 2006, CBS and CPB (MEV)


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