The Dutch economy has grown faster than the euro area average over the past few years reflecting recovering consumption and investment, and strong net exports. The unemployment rate reached a decade low, but slow productivity growth and growing labor market duality have constrained wages and contributed to low inflation. Moreover, progress with tackling long-standing imbalances in the households and corporate sectors, and thus external imbalances, has lagged. Households remain highly leveraged and their consumption constrained by a stagnating disposable income. In the corporate sector, dominated by large multinational corporations (MNCs), investment is low but savings are high, and developments are diverging with domestic small and medium enterprises (SMEs) relatively stagnant. Strong fiscal performance in recent years has boosted buffers that can now be used to reduce distortions and strengthen potential growth.