Dutch economy slowing down; Only 0.1% growth in second quarter
The Dutch economy is slowing down. At 0.1 percent economic growth in April, May, and June, the second quarter marked the fifth quarter in a row of declining growth. Government spending and business investments kept the economy going, but consumer spending was down, Statistics Netherlands (CBS) reported on Wednesday.
In the first quarter of 2024, the economy grew by 0.3 percent. The last quarter of 2024 saw growth of 0.4 percent. “It’s been a little bit slower each time,” CBS economist Peter Hein van Mulligen said, NU.nl reported. “The growth isn’t great. It is still growth, which is positive, but the Dutch economy is slowly losing steam.”
Business investment and government spending drove the economic growth last quarter. Companies and the government invested 1.5 percent more in fixed activities, especially spending more on transport, such as ships and aircraft. Government spending increased by 0.8 percent.
Unlike in previous quarters, households did not contribute to the economic growth in Q2, with household consumption decreasing by 0.4 percent. Dutch households spent less, especially on hospitality and recreation. Spending on clothing also declined a bit. “The decline could also be due to the fact that spending was quite high in the first quarter,” Van Mulligen said. “It might be a once-off.”
According to the economist, it is still difficult to estimate whether the trade agreement between the European Union and the United States will impact economic growth in the coming quarters. The EU and US settled on America imposing a 15 percent import tariff on virtually all European goods, with some exceptions. The tariff is higher than hoped for, but at least the deal removes uncertainty for businesses.
“It is difficult to say to what extent uncertainty plays a role. Uncertainty is difficult for companies, but in the second quarter, corporate investments actually contributed very well to growth,” Van Mulligen said.
