Dutch economy to grow 4.2% this year: Rabobank

The Dutch economy will likely grow by 4.2 percent this year and 3.7 percent next year, Rabobank wrote in a report. This is mainly due to the strong growth in international trade, but also because more is being consumed and invested and government spending is increasing. The bank expects that almost all business sectors will have fully recovered from the coronavirus crisis by 2022, provided no new restrictive measures are taken.

The recovery in the Netherlands is stronger than in other European countries, the bank wrote. In the months of April, May and June, the economic growth was "unexpectedly strong". The economy could also continue grow more. "Without the pandemic, the economy would have grown by more than 2 percent in the meantime," chief economist Ester Barendregt said in the report. Therefore, the bank expects "relatively strong" growth in gross domestic product in the second half of this year. That is likely to be above pre-pandemic levels in the third quarter.

Rabobank did warn against uncertainties, such as new coronavirus measures that could "hit the economy hard again". The existing bottlenecks such as personnel shortages, hitches in production chains, shortages of parts such as computer chips and price increases of raw materials can also cause more or new problems. New restrictive measures could also lead to high inflation, which means that households have less to spend and consumption recovers more slowly, the bank said.

According to the bank, that the coronavirus support from the government will be phased out on 1 October is "a responsible choice", because otherwise companies that are not future-proof will continue to be supported. The phasing out of support is expected to slightly reduce the current tightness on the labor market, the bank believes. People who now have corona jobs will then become available for other sectors.

Almost all sectors can count on a favorable outlook, the bank said, thanks to the vaccinations that provide more control of the virus. According to Rabobank, this means that almost all restrictions can be released in the last months of the year, except for the event industry and nightlife catering.