Foreword
We present you with our Outlook 2009. 2008 is almost at an end, and will go down in history as one of the most turbulent years ever. The credit crisis, spawned in 2007, initially seemed to spread at a covert level. It appeared to be a problem chiefly pertaining to the financial sector. Certainly in the Netherlands, the real economy felt little or nothing of the early impact. But now, just a few months since Budget Day, the projections of the cabinet when presenting the budget seem to belong to a different era.
This autumn, the global economy just managed to escape a full-scale systemic crisis. The growth of economic activity has come to an abrupt halt in the past few months. And confidence among consumers and producers is an historic low. Unfortunately, the outlook for next year remains far from rosy. However, I believe that we have put the most acute pain of the financial crisis behind us. But the real economy - the world of people and machines - stands on the brink of a worldwide recession.
The recession will not leave the Dutch economy unscathed. For 2009, our economists expect zero economic growth. Only government spending will remain higher than in 2008. Consumer spending, investment and exports will all shrink to a greater or lesser degree. The weak economic development will impact on employment in 2009. From now on, unemployment will rise and will reach about 5% by the end of next year. Nonetheless, this country still has a relatively tight labour market. That is the reason why wage growth in the Netherlands will probably exceed that of our neighbouring countries, where unemployment is already rising and economic performance is poorer. This presents our economy with a mixed blessing. On the one hand it is bad news for our international competitiveness. The fact that the dollar has recently gained ground against the euro does not offer much consolation, since the US only accounts for a limited share of our export market. On the other hand, however, higher wage growth supports consumer purchasing power, which will help contain the downturn.
The government has an important role to play in the economy of 2009. It intervened with timely and effective measures to prevent total meltdown in the financial system. Since then it has also announced a comprehensive package of measures to stimulate economic growth. Again, well timed and well aimed. Although these will create short-term bottlenecks for the budget, we have to remember that necessity is the mother of invention. If the economy should sink into a deep recession, government finances would also go into overdrive, but in a much more negative context. At the moment, the money spent by the government is contributing to economic growth, and the tax reliefs already announced will help boost purchasing power.
Although it looks as though 2009 will be a difficult year, I am convinced that better times are not far away. All the praise that has been heaped in the recent past on the fundamental strength of the Dutch economy and housing market still rings true. According to our economists, the first signs of recovery will be visible as soon as late 2009, which is well within the horizon.
Despite the rather unappealing prospects for next year, I nonetheless hope you enjoy reading our Outlook 2009. Be assured that Rabobank is ready to support you in making the right financial decisions. Not merely out of a sense of duty, but because we love to do so. In the meantime, I wish you and yours every success, but especially health and happiness in 2009.