Dutch Disease is an economic term for the negative consequences that can arise from a spike in the value of a nation’s currency. Named after Holland’s experience with natural gas exports in the 1970s, Dutch disease can refer to any economy that experiences rapid growth in one sector (usually mining or energy) while other sectors struggle.When a country’s currency becomes too strong, it can make it difficult for other industries to compete both domestically and internationally. This is because exported goods become more expensive, while imported goods become cheaper. The result is usually an increase in imports and a decrease in exports, which can lead to trade deficits and unemployment.
