Retail Savings & Investments in Netherlands: Coronavirus (COVID-19) Sector Impact

Retail Savings & Investments in Netherlands: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020, and many experts predicting the potential onset of recessionary environments.

A similar trend is expected in the Netherlands. According to the IMF, the Dutch economy will shrink by 7.5% in 2020, with the unemployment rate set to hit 6.5%. The Bureau for Economic Policy Analysis - an independent research institute under the Dutch Ministry of Economic Affairs and Climate Policy - estimates that the pandemic will cause a 7.7% decline in the country’s GDP, which is more severe than the 2008-09 global financial crisis. This disruption will impact the country’s wealth industry.

This report focuses on the impact of the Coronavirus outbreak on the Dutch economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

- Low equity allocations will shield the Dutch retail savings and investments market from contraction, with Dutch retail savings and investments forecast to increase by 1.6% over the course of 2020. However, we expect retail mutual fund and equity holdings to contract by 22.6% and 10.4% respectively, as the economy has come to a standstill thanks to the impacts of COVID-19.
- Retail deposits holdings, on the other hand, are set to fare better than initially expected courtesy of a flight to safety away from risk assets. This asset class is set to record growth of f 6.1% over the course of 2020, which is higher than the previous prediction of 2.8%.
- The effects on the different segments that make up the HNW market will be disproportionate. The financial services and investments sector, which is the largest contributor to Dutch HNW wealth, has already taken a significant hit, as indicated by the 38% decrease of the AEX Financials index since the beginning of the year.
- The tech and (albeit to a lesser extent) healthcare sectors - the second- and third-largest contributors to HNW wealth - have fared better, with the AEX Technology index up 3% for the year to date while the AEX Health Care index has fallen by a comparatively modest 5%.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Dutch retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Dutch retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Netherlands, including deposits, mutual funds, equities, and bonds.