The Netherlands’ gross domestic product fell by 0.3 percent on a quarterly basis in the second quarter of 2023, according to preliminary data from Statistics Netherlands (CBS). The fifth largest economy in the Eurozone was also in the red in the first quarter. So we are dealing with a technical recession in the Netherlands.
On Wednesday, CBS released its first GDP estimate for the second quarter of 2023. The Dutch economy contracted 0.3% between April and June, compared to a 0.4% contraction in the first quarter.
Technical stagnation in the Netherlands
Thus, the country found itself in a technical recession, the office confirmed, while noting that it was “light” for the time being. The economy of the Netherlands is the fifth largest in the eurozone.
The data surprised analysts. Market consensus, the median forecast of analysts polled by Bloomberg, assumes an increase of 0.2 percent.
“It’s not quite a classic recession. It’s not as if the Netherlands has suddenly found itself on the brink of an economic abyss with massive bankruptcies and massive unemployment,” said Peter Hein van Meulgen, chief economist at CBS. In his view, this is just a mild recession caused mainly by lower consumer spending and higher interest rates.
Consumer spending decreased by 1.6% and exports by 0.7%. Less than in the first quarter of this year.
“I hope the situation will improve, because we have solid foundations such as low unemployment and high investment,” he commented on the latest data of State Minister for Economic Affairs Miki Adriansens, reported by the Financieele Dagblad daily.
Inflation in the Netherlands is down from a peak of 14.5% in 2016. On an annual basis in September last year, it is still relatively high. Price increase in the second quarter of this year averaged about 6% year on year.
The second estimate of GDP in the second quarter of this year. It will be published on September 22nd.
Main image source: Jan van der Wolf/Shutterstock
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