The great Brexit gamble paid off: Prime Minister Johnson got his majority in the House of Commons and he will now be able to ‘get Brexit done’. The UK will leave the EU by January 31.
Economic Quarterly Report
We expect the global economy in 2020 and 2021 to show the slowest rate of growth since the financial crisis. This is mainly because the global economy is reaching the limits of its output capacity and industrial activity and world trade are weakening further.
Since 2017 the US has blocked the appointment of new members of WTO’s Appellate Body, which per 11 December is unable to fulfil its tasks. Consequently, trade disputes would again have to be resolved according to the GATT regime, means trade rules will be dictated by the most powerful countries.
The Netherlands was again amongst the quickest growing countries of the Eurozone in the third quarter, mainly due to increased consumption. However, slowing world trade and domestic issues with nitrogen and PFAS will drag down future growth.
Even though PM Johnson’s Brexit deal would only lead to limited checks, we don’t expect the EU to accept his proposal. They are treading carefully to avoid any blame and count on the UK Parliament to prevent a no-deal Brexit on October 31.
China’s lower economic growth together with smaller and more targeted stimulus compared to previous episodes dampen the global outlook. Together with a potential shift in global policy responses, this likely means a new shift lower in bond yields again soon.
Soon, President Trump will announce what to do with tariffs on EU cars. We think he will not hike tariffs just yet, but will keep the tariff threat alive. Within the EU, the German and Hungarian economy are most vulnerable to higher car tariffs in the US.
Dutch Housing Market Quarterly
The third quarter of 2019 was dominated by higher sales and lower growth in house prices. However, this levelling off is slower than expected, partly due to lower mortgage interest rates and a persistent housing shortage.