The Dutch economy is projected to grow by 2.7% in 2021 and 3.7% in 2022, reaching pre-crisis levels at the beginning of 2022. Consumption will drive the recovery as households normalise their saving after the sharp increase in 2020. Private investment will improve, but continue to be held back by lingering uncertainty. Bankruptcies are expected to rise and unemployment is set to peak in the second half of 2021 following the phasing out of support measures.
The pandemic highlighted job insecurity of non-standard work contracts, which represent a considerable share of employment. To prevent a long-lasting impact on workers, the top policy priority should be to improve the targeting of active labour market policies. Increasing resilience and inclusiveness of the labour market will necessitate rebalancing the employment protection on various types of contracts in the longer term.
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2021 Structural Reform Priorities
The economy is in the midst of a strong expansion. Improved global economic developments have led to solid export growth. In turn, high domestic and external demand and still favourable financial conditions have stimulated private investment. Positive labour market developments, supportive fiscal policy and a stronger housing market have boosted private consumption growth.