The Netherlands has a developed economy and has been playing a special role in the European economy for many centuries. Since the 16th century, shipping, fishing, agriculture, trade, and banking have been leading sectors of the Dutch economy. The Netherlands has a high level of economic freedom. The Netherlands is one of the top countries in the Global Enabling Trade Report (2nd in 2016), and was ranked the fifth most competitive economy in the world by the Swiss International Institute for Management Development in 2017. In addition, the country was ranked the second most innovative nation in the world in the 2018 Global Innovation Index.
As of 2020, the key trading partners of the Netherlands were Germany, Belgium, the United Kingdom, the United States, France, Italy, China and Russia. The Netherlands is one of the world’s 10 leading exporting countries. Foodstuffs form the largest industrial sector. Other major industries include chemicals, metallurgy, machinery, electrical goods, trade, services and tourism. Examples of international Dutch companies operating in Netherlands include Randstad, Unilever, Heineken, KLM, financial services (ING, ABN AMRO, Rabobank), chemicals (DSM, AKZO), petroleum refining (Royal Dutch Shell), electronical machinery (Philips, ASML), and satellite navigation (TomTom).
The Netherlands has the 17th-largest economy in the world, and ranks 11th in GDP (nominal) per capita. Between 1997 and 2000 annual economic growth (GDP) averaged nearly 4%, well above the European average. Growth slowed considerably from 2001 to 2005 with the global economic slowdown, but accelerated to 4.1% in the third quarter of 2007. In May 2013, inflation was at 2.8% per year. In April 2013, unemployment was at 8.2% (or 6.7% following the ILO definition) of the labour force. In February 2019, this was reduced to 3.4%.
In Q3 and Q4 2011, the Dutch economy contracted by 0.4% and 0.7%, respectively, because of European Debt Crisis, while in Q4 the Eurozone economy shrunk by 0.3%. The Netherlands also has a relatively low GINI coefficient of 0.326. Despite ranking 11th in GDP per capita, UNICEF ranked the Netherlands 1st in child well-being in rich countries, both in 2007 and in 2013. On the Index of Economic Freedom Netherlands is the 14th most free market capitalist economy out of 180 surveyed countries.
Amsterdam is the financial and business capital of the Netherlands. The Amsterdam Stock Exchange (AEX), part of Euronext, is the world’s oldest stock exchange and is one of Europe’s largest bourses. It is situated near Dam Square in the city’s centre. As a founding member of the euro, the Netherlands replaced (for accounting purposes) its former currency, the “gulden” (guilder), on 1 January 1999, along with 15 other adopters of the euro. Actual euro coins and banknotes followed on 1 January 2002. One euro was equivalent to 2.20371 Dutch guilders. In the Caribbean Netherlands, the United States dollar is used instead of the euro.
The Dutch location gives it prime access to markets in the UK and Germany, with the Port of Rotterdam being the largest port in Europe. Other important parts of the economy are international trade (Dutch colonialism started with co-operative private enterprises such as the Dutch East India Company), banking and transport. The Netherlands successfully addressed the issue of public finances and stagnating job growth long before its European partners. Amsterdam is the 5th-busiest tourist destination in Europe with more than 4.2 million international visitors. Since the enlargement of the EU large numbers of migrant workers have arrived in the Netherlands from Central and Eastern Europe.
The Netherlands continues to be one of the leading European nations for attracting foreign direct investment and is one of the five largest investors in the United States. The economy experienced a slowdown in 2005, but in 2006 recovered to the fastest pace in six years on the back of increased exports and strong investment. The pace of job growth reached 10-year highs in 2007. The Netherlands is the fourth-most competitive economy in the world, according to the World Economic Forum‘s Global Competitiveness Report.