As much of the rest of Europe tries to tackle rampant financial
problems and growing debt, the Netherlands is actually shrinking
its rate of borrowing. The belt-tightening, however, may be too
little, too late.
iShares MSCI Netherlands (NYSEArca: EWN)
like the Netherlands economy, has been a mixed bag this year. More
hurdles may be in store:
- Netherlands' budget deficit will likely edge up to 4.1% of
GDP from an early forecast of 3.9% as slower world trade,
government spending cuts and weak domestic consumption weighs
down the economy,
reports Gilbert Kreijger for Reuters
- The Netherlands' Bureau of Economic Policy Analysis (
) expects a 5.8% budget deficit for 2010 and cautions that slower
international growth will hold back the country's economy -
around 70% of Netherlands' GDP is based on exports. The CPB
projects growth of 1.5% in 2011 and 1.75% for this year.
According to 4Hoteliers
, the Netherlands has to work with an aging population and a
diminishing pool of workers, which would reduce future potential
The Netherlands will reduce the amount it will borrow to $155
billion next year as the government tries to reduce its budget
writes Jurjen van de pol for BusinessWeek
. The government hopes that austerity measures and recovering tax
income will further reduce next year's budget deficit to 4% of GDP,
which is above the E.U.'s 3% ceiling for a second consecutive
The Netherlands looks like it's doing all it can to get spending
under control, which may mean weakness in the short-term. EWN is up
just 1.4% year-to-date, which given Europe's troubles this year, is
no small feat.
For more information on the Netherlands, visit our
Max Chen contributed to this article.