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Reasons Of The Rich Economy in Netherlands

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Reasons Of The Rich Economy in Netherlands

The Netherlands is one of the richest countries in the world. So why is the Dutch economy so rich? According to the International Monetary Fund and the World Bank, the Netherlands ranks eighteenth among the countries with the world’s largest economy.

It is a member of the European Union, Eurozone, Schengen Area and NATO.

According to the 2018  Human Development Index , the Netherlands ranks 3rd.

The Netherlands is described as the most democratic, free and liberal country and is among the exemplary countries in the protection of human rights.

The Netherlands is also considered the best place in the world for children.

1. Port of Rotterdam – one of the largest in the world

Rotterdam is a very important city for the Dutch economy. It is famous for its port, which is one of the largest and busiest ports in the world.

It plays a very important role in the export and import of goods and raw materials, not only in the Netherlands, but in Europe as a whole.

Although located in the Netherlands, it is also called the “largest German port” due to its significant impact on the German economy. In fact, most of the raw materials needed to support the highly developed German industry come from the port of Rotterdam.

The port can serve even the largest ships in the world. It brings hundreds of millions of Euros in revenue to the Dutch economy every year. Just a small part of the advantages of owning such a port. The port of Rotterdam brings many other benefits to the Netherlands.

It is a good basis for the development of trade and finance. Having one of the largest ports makes the Netherlands a very attractive place for foreign investment.

The Netherlands is the world’s second largest exporter of agricultural products after the United States and has one of the most developed food industries in the world.

Despite its small area, the Netherlands is a real giant in agriculture. Dutch farmers often joke that their country is small, but that every square meter of their land is of the highest possible quality.

In terms of income from the export of agricultural products, the Netherlands ranks first in Europe and second in the world, only relative to the United States.

The combination of fertile soils, mild humid climate and a high degree of mechanization provides a very good basis for the development of the industry.

The Netherlands is a global producer of vegetables (tomatoes, cucumbers, etc.), fruits (apples, pears, etc.), dairy products (local cheeses are among the most famous in the world), and flowers (mainly tulips).

It also produces a number of famous food products such as Gouda cheese, as well as some popular beverage brands such as Amstel and Heineken beers.

The country is also famous for its high quality chocolate and sausages.

2. Investing in Innovations and Perspective Sectors

The Netherlands invests large sums in various sectors of the economy, such as medicine, education, new technologies, ecology, the mechanization of agriculture and others.

Despite the lack of resources for green energy production, the country is making great efforts.

It is predominantly on wind energy produced by turbines in the coastal areas of the North Sea.

The Dutch city of Eindhoven, along with parts of its neighboring countries, is well on its way to becoming the continent’s most innovative, promising and perspective destination.

3.Advanced Industry

Similar to Japan and South Korea, the country is poor in resources.

Although the Netherlands has to import almost all the raw materials it needs, it has a highly developed industry.

The country imports cheap resources and exports high-quality ready-to-use production abroad. The Netherlands actually produces almost everything it needs.

It is among the world leaders in technology and electronics. Here is the headquarters of tech giant Phillips and sports car brand Spyker Cars.

4.Engineering Genius

Most of the Netherlands is below sea level. Dutch engineers therefore face unprecedented challenges compared to engineers in other countries.

Trying to protect their country from rising sea levels, some of the world’s best scientists are innovating in the Netherlands.

One of them is the movable barriers that protect the city of Rotterdam from flooding in bad weather conditions.

The system is so perfect that it can react on its own without the need for human intervention.

In the event of sea level rise in the North Sea, the system automatically decides whether to close the protective barriers and calculates the flood risk.

So the location of the Netherlands is the main reason why the engineering genius has survived to this day in trying to protect people from the changing moods of mother nature.

In the last ten years, a few countries in the world have managed to turn their disadvantages into advantages; The Netherlands is one of them.

5. The Netherlands Is One of the Leading Financial Centers

When it comes to finance, good reputation is one of the most important factors. And the Netherlands has a very good international image.

Most people describe the country as rich, peaceful, stable, modern, democratic and successful.

After a century of rapid economic development, the Netherlands today is one of the world leaders.

Here is one of the world’s leading financial institutions like the famous ING company. Also, few people know that the Amsterdam Stock Exchange is the oldest stock exchange in the world.

6. Developed Tourism Industry

The Netherlands is one of the most visited addresses in Europe and its biggest attraction, Amsterdam is one of the cities considered the most modern and tolerant throughout Europe.

The city is also home to the largest number of museums in the world. More than four and a half million tourists visit the country every year.

Tulips, windmills, and vast fields planted with canals that surround the country are some of the symbols of the Netherlands.

7. Entrepreneurial Spirit

A country is rich when its people are rich. And the best way to achieve this goal is to encourage entrepreneurship among the population.

The Netherlands is one of the countries with the highest percentage of entrepreneurs per capita. The foundations of this way of thinking are laid in early childhood.

The Dutch teach their children at home and at school to be creative and to embrace new and unusual ideas.

You often hear people say ‘Come to the Netherlands and see what the world will look like in a few years’. And this is quite true.

Considering the percentage of the population, the country is among the places with the highest number of enterprises in the world, and Amsterdam knows no rivals in this regard.

We live in an era of hi-tech and the Dutch population has been able to take advantage of this fact successfully – most Dutch startups today are online.

Population is a country’s greatest wealth when it comes to entrepreneurship. Like Switzerland, different languages ​​are spoken in the Netherlands.

In addition to the official Dutch language, almost all people in the country speak English and German. The population has the opportunity to receive an excellent world-class education.

Although the Netherlands is a small country, some of the best universities in the world are here.

The percentage of the population with internet access, including free wireless internet access in major cities, is among the highest in the world.

8. Rich Neighbors

An important factor in the development of the Dutch economy is that the country is surrounded only by rich and powerful nations.

Its neighbors are Belgium and Germany, and it is surrounded by other wealthy states such as Luxembourg, France, England and Denmark.

In fact, the Netherlands is the center of one of the most economically developed regions in the world.

9. Excellent Infrastructure

The Netherlands is undoubtedly one of the top ten countries with the best infrastructure in the world and is often compared to South Korea.

The perfect network of highways, modern airports and seaports can eclipse almost any country in the world.

The Netherlands holds the prestigious first place when it comes to the quality of the electricity grid and the reliability of electricity.

10. Immigration Policy

The Netherlands has the smartest and most balanced immigration policy of all the other countries on the continent.

Despite being a member of the EU, the Netherlands accepts a large number of highly skilled immigrants from outside the community.

It is often encouraged from other states because of the easy and fast work visa issuance procedure for highly skilled workers, which drives the economy forward and makes it more competitive.

Berry moved to the Netherlands for her art studies. She is living in Amsterdam for 16 years. You can see her in Amsterdam streets with her fancy pink bike. She is a professional photographer and blog journal lover.

Economy

Fiscal budget 2023 in the Netherlands, Taxes, Health Insurance and Salaries

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Fiscal budget 2023 in the Netherlands

Fiscal budget for 2023 has been announced in the Netherlands, What Will Change in Our Lives in the New Year? Taxes, health insurance and salaries.

The Netherlands announced its 2023 fiscal budget. Pursuant to the 2023 Budget Draft Law, purchasing power will increase by an average of 3.9 percent next year. However, this year, the people will become poorer by 6.6 percent.
The financial budget draft for 2023, called the “Millions Note”, has been announced.

Details of the Financial Budget for 2023:

1- In 2023, a maximum increase of 10 euros will be made in Health Insurance premiums. The premiums, which are 127 Euros this year, will therefore increase to a maximum of 137 Euros. It will officially announce the decision on Budget Day. Compulsory health insurance contribution will not change in 2021 and will remain at 385 euros.
2- The minimum wage will be increased by 10 percent. 10 percent increase to the minimum wage in the Netherlands! The New Minimum Wage for 2023 has been determined as 1932 euros.
3- Rent, health and energy aids to low-income people will be increased.
4- The amount of scholarships to be given to students will be increased.
5- A budget of 17.2 billion Euros has been allocated to increase the purchasing power of the people.
6- While the taxes of employers will be increased, the tax rate deducted from the employees will be reduced, albeit slightly.
7- Dutch natural gas and electricity will be priced gradually. Those who burn less will pay less, those who burn more will pay more. Thanks to the ceiling price application, an average household will save 2,280 Euros per year and 190 Euros per month.
Annual consumption of 1200 cubic meters of gas and 2400 kilowatt-hours of electricity will be charged at a low price. Over consumption will be subject to a high tariff.
8- General transfer tax rate will be increased from 8% to 10.4% when purchasing residential investors or commercial property.
9- Health benefits are increasing. In 2023, 412 euros will be added to the health allowance, which means an extra 34 euros per month. The maximum health benefit increases to 154 Euros.
10- Housing allowance will increase by 16.94 euros per month structurally.
11- Children’s budget is also increasing. In addition, the maximum repayment of childcare allowance is increasing: to a 96 percent repayment in 2025 (currently 95 percent).
12- Savings up to 57,000 euros per person will be exempt from wealth tax. This was 50,000 euros on tax return in 2021, compared to around 31,000 euros in 2020.
13- Income tax decreases. The rate in the first tranche (for incomes up to around 70,000 Euros) will be reduced. A decrease of 0.11 percent, meaning that the net monthly net employee will receive more. However, employees will not notice much difference because the rate is so low.
14- SCT accijnzen discount from fuel has been extended until July 1, 2023.
15- Students who stay away from home will be given an extra 165 euros as of September 2023.
Next year, the Dutch government will receive 366.4 billion euros in revenue, against a total expenditure of 395 billion euros. Health is in the first place with an expenditure of 105 billion euros. In the income item, it ranks first with 80 billion Euros to be collected in worker taxes and premiums.

The Dutch people will be poor by 6.6 percent in 2022, and their income will increase by 3.6 percent in 2023.

Acting that all problems will end in 2023, the Dutch government predicts that the public’s purchase day will increase by an average of 3.9 percent. For this year, a 6.6 percent decline in average purchasing power is expected.

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Economy

Inflation in the Netherlands reached a record high of 13.6% in August

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According to the August data of the Dutch National Statistics Agency (CBS), inflation in the Netherlands reached a new record with 13.6 percent. It is stated that this is the first time that we are faced with such a high rate this year, while GIS data is calculated according to the European inflation calculation method.

High energy prices are cited as the main reason for the record. Natural gas prices continued to rise and energy bills continued to rise in August.

The period approaching this level earlier this year was March with 11.7 percent.

CBS currently forecasts inflation to remain at these levels. While the average inflation rate for this year is 9.9 percent, an inflation rate of 4.3 percent is expected next year. Economists think that poverty will increase in the coming period in this direction.

In the Netherlands, the cabinet is working on a support package for households struggling with rising energy prices.

CBS made this calculation into the European calculation method, the Harmonized Consumer Price Index (HICP). According to the calculation method of CBS, the inflation rate will be published next week.

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Economy

Euro Dollar Race: All balances are changing!

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euro dollar parity

The dollar continues to strengthen against major currencies as it is seen as a ‘safe haven’ by investors. While the depreciation of the Euro continues; The Euro-Dollar parity declined to the level of 1.0000, and the Euro and the dollar were equalized. This had happened 20 years ago.

As the US currency dollar continues to strengthen around the world, the euro continues to depreciate. EuroDollar parity declined to the level of 1.0000 in the transactions on the second day of the week; saw its lowest level in the past 20 years, thus making 1 dollar equal to 1 euro. This had happened before in December 2002. As of 12:29, the Euro Dollar parity is moving at 1,0004, down 0.35 percent.

The expectation that the European Central Bank (ECB) can act more calmly in interest rate hikes is also effective in this depreciation in the Euro. The ECB is expected to raise interest rates for the first time in 11 years at its July meeting.

EUROPE CLOSE TO THE RECESSION

Europe stands closer to recession than the United States. The Russian-Ukrainian war comes to the fore in this deterioration in the European economy. With the start of the Russia-Ukraine war, the huge increase in energy prices affected the European Union negatively.

THE DOLLAR IS STRENGTHENING IN THE WORLD

The dollar continues to appreciate against all major currencies. With investors turning to the dollar as a safe haven; The dollar index, which measures the value of the US dollar against 6 currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, rose to the level of 108.50, climbing to the highest level in 20 years.

The most important factor influencing the strengthening of the dollar in the world is the decline in the risk appetite… The rise of Covid-19 cases in China and the emergence of epidemic measures; It caused investors to exit risky assets and rise to safe havens. With the decrease in risk appetite, there were decreases in world stock market indices.

EYES ON US INFLATION

The markets focused on the US June inflation figures, which will be announced. The market expectation is that US inflation will reach 9 percent on an annual basis and renew the highest level in 41 years.

The Federal Open Market Committee meeting (FOMC), which determines the Fed’s monetary policy, will be held on July 26-27. Looking at the market pricing, it is seen that the expected rate hike from the Fed is 75 basis points.

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