Dutch economy remains in recession after third straight quarterly GDP fall
The Dutch economy again shrank slightly in the third quarter, meaning that the Netherlands remains in a recession, which occurs after two months of economic contraction. Gross domestic product (GDP) fell 0.2 percent compared to the previous three months, partly because companies invested less in things like machines, buildings, and transport, Statistics Netherlands (CBS) reported.
Energy companies contributed significantly to the contraction, CBS said. While achieving considerable added value due to the high energy prices last year, that was now much less the case. Companies in sports, culture, and recreation also contributed to the economy’s decline.
In the first and second quarters, the Dutch economy shrank by 0.5 and 0.4 percent, respectively - a slightly more substantial decline than CBS previously calculated.
The statistics office thinks the economy will also shrink in the current quarter. “The first signs show a continuation of previous quarters. Consumer confidence is still low, and there is no recovery in the industry,” CBS economist Peter Hein van Mulligen said.
Consumer spending was at about the same level in July, August, and September as in the three preceding months. The government increased expenditure on things like public administration and education.
Just like earlier this year, the Netherlands exported a lower total to other countries, with exports dropping 1.6 percent compared to the second quarter. However, the purchase of goods and services from abroad fell even faster (-2.3 percent). As a result, international trade still positively contributed to the Dutch economy's size.
While the Dutch economy continued to contract, there was actually 0.1 percent growth across the entire European Union taken as a whole. There were many differences between the Member States. In France and Belgium, GDP rose by 0.5 and 0.1 percent respectively. Germany actually experienced a 0.1 percent contraction.
At the same time, CBS pointed out that the Netherlands recovered much faster than others from the coronavirus crisis. Compared to the last quarter of 2019, just before the outbreak of the coronavirus pandemic, growth in the Netherlands was stronger than in neighboring countries. That difference is currently narrowing.
Consumers also bought fewer goods and spent less money on services in September, the CBS said. Compared to September last year, spending was down by 1.9 percent.
Last September, people spent 0.3 percent less on services, including insurance, public transport, event tickets, and visits to the hairdresser. This was the first annual decline since March 2021, when the coronavirus pandemic was still part of everyday life. In previous months, people actually spent more on services.
Consumers also spent less money on food, clothing, home items, and other goods. Spending on other products, such as energy and personal care items, fell by 7.1 percent. People did spend more on automobile purchases, according to Statistics Netherlands.
Reporting by ANP and NL Times