Hesitant consumers brought Dutch economic growth to a near standstill in Q1

The Dutch economy barely grew in the first quarter of this year, Statistics Netherlands (CBS) reported based on the currently available data. The statistics office recorded a growth of 0.1 percent compared to the fourth quarter of 2024, attributing the nearly non-existent growth to less consumer spending and fewer investments in fixed assets. Compared to Q1 of 2024, the economy grew by 2 percent.

The little bit of growth in the first quarter was thanks to a smaller reduction in inventories than in the previous quarter. Government consumption also made a “slightly positive contribution,” CBS said.

Government consumption increased by 0.5 percent in the first quarter. As in previous quarters, the government spent more on healthcare, and the number of civil servants grew. Household consumption, on the other hand, decreased by 0.2 percent compared to the previous quarter. Dutch citizens spent less on food, luxury goods, and transport, among other things.

Investments in fixed assets also decreased, falling by 2.2 percent. Investments in passenger cars and vans, in particular, declined. “This decline coincides with tax changes and changing rules regarding environmental zones in some cities,” CBS said. “In the last months of 2024, investments in passenger cars and vans actually grew sharply.”

Exports of goods and services decreased by 0.8 percent in the first quarter, compared to the previous quarter. Imports of goods and services decreased by 0.1 percent, resulting in a higher trade surplus.

The added value - the difference between production and consumption of energy materials and services - increased in most sectors in the first quarter. The energy sector saw the strongest growth at 5.8 percent. The government and healthcare sector grew by only 0.5 percent, but it made the biggest contribution to economic growth given the size of the sector. The added value of mining, agriculture and fisheries, business services, and industry decreased, depressing economic growth.

Compared to the first quarter of 2024, the economy grew by 2.0 percent. Government consumption and the trade balance contributed the most to this growth. Government consumption rose by 2.8 percent, household consumption by 0.6 percent, and investments by 1.5 percent. Exports were 0.9 percent higher, while imports increased by 0.6 percent.