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S&P affirms The Netherlands 'AAA' long-term rating

Willemstad, Curacao, 01-14-2013

The ratings reflect our view of The Netherlands' prosperous, diversified, and competitive economy, visible in its strong net external position and high per capita GDP. The ratings also reflect our view of its long track record of prudent and flexible macroeconomic policy. We consider the Dutch economy to be highly competitive and productive, with GDP per capita of $47,000 (EUR36,900) in 2012, and, despite rising layoffs since 2011, one of the lowest unemployment levels in the EU, at 5.6%. The Dutch economy is also an open one, with exports of goods and services accounting for 85% of GDP in 2012. Competitiveness of the Dutch economy is supported by a highly productive workforce and well-developed physical infrastructure. Driven by healthy trade surpluses, we expect the Dutch current account surplus to average just under 9% of GDP between 2012-2015. Strong current account surpluses have led to the accumulation of significant external assets in the private sector (in particular, in the form of assets of pension funds and insurance companies). We estimate that The Netherlands' net internal investment position will reach a positive 40% of GDP in 2012. We expect general government net debt to continue to rise gradually to reach 66% of GDP, from 62% in 2012, as fiscal deficits remain close to 3% and economic growth remains sluggish at an average of less than 1% per year in 2013-2015, in our view.

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