Dutch consumer spending boosts economy amid low confidence

Dutch consumers helped drive economic growth in the third quarter, despite lingering pessimism. Spending rose by 0.8 percent during the period, led by purchases in clothing and home goods, even as consumer confidence remains in negative territory, according to Peter Hein van Mulligen, chief economist at Statistics Netherlands (CBS). "The sentiment is still gloomy," van Mulligen noted. "But that’s not how we’re acting."

Household spending had dipped 0.8 percent in the previous quarter. However, higher wages and government support have bolstered consumer purchasing power, despite inflationary pressures. “Wages are increasing faster than prices, though inflation remains high in housing and tobacco. So, those not renting or smoking feel less impact from rising costs,” van Mulligen explained.

Consumer confidence remains low, recorded at minus 21 in September and slightly falling to minus 22 in October. According to CBS, any figure below zero reflects overall negative sentiment, with positive sentiment indicated by numbers above zero.

Van Mulligen cited high prices as a primary factor behind consumer pessimism, especially in supermarkets. “The peak of inflation may be behind us, but people are still shocked by high grocery prices. Everything feels very expensive,” he observed, noting that many consumers are adjusting slowly to today’s pricing. “It’s not yet normal to pay 5 euro for a loaf of bread,” he added.

Meanwhile, economic forecasters, including ING, are cautious about future growth. While the third quarter exceeded ING’s projected growth of 0.3 percent to 0.5 percent, they predict slower growth in the coming quarters, noting challenges in industrial output and geopolitical tensions that may further pressure the market.