The State of the Economy in the Netherlands

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Netherlands is the fifth- largest economy in the Euro-zone. It is known for its stable economic relations with the industrial sector, moderate inflation and unemployment. It also has a sizable trade surplus and plays an important role as the transportation hub. The industrial sector deals mainly in food processing, chemicals, petroleum refining and electrical machinery. The agricultural sector is highly mechanized thus only provides employment to only 2% of the population but provides surpluses to the food- processing industries and for exports. Netherlands along with 11 other of its EURO partners started spreading it’s currency from 1 January 2002. The Dutch economy after 26 years of uninterrupted stability was left contracted by 3.5% owing to the international financial crisis. The Dutch economy suffered because of the close contact between some of its banks with the US mortgage- backed securities. In 2008 the government nationalized two banks and injected billions of dollars to stem the losses in that crucial sector. In an effort to boost the economy the government started infrastructure projects and gave tax breaks to the employers to retain the workers and expanding export credit facilities. The stimulus programs and bank bailouts led to a deficit of 5.3% in the GDP, in 2010, as compared with a surplus of 0.7% in 2008. The Prime Minister started implementing fiscal consolidation measures in early 2011, which resulted in a reduced fiscal deficit to 3.8% of the GDP. In
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