Dutch economy will only be back on pre-Covid levels in 2022: ABN Amro

It will take the Dutch economy until 2022 to fully recover to pre-coronavirus crisis levels, according to ABN Amro economists. The economy recovered slightly in May from the severe blows in March and April, partly thanks to more lockdown measures being relaxed. But there is more bad times ahead, according to the bank.

In the third quarter - the current quarter - the economy will grow strongly compared to the second quarter, after the low point was reached in April and May due to the lockdown closing multiple sectors. The picture was already more positive in June, but consumers still spent 10 percent less than in the same month last year.

But in the fourth quarter of this year and the first quarter of 2021, the small economic recovery will be threatened by so-called second round effects. "Higher unemployment, bankruptcies, and supply chain disruptions will hold back a rebound in growth," Nora Neuteboom said to RTL Nieuws.

Despite the lockdown being relaxed, entrepreneurs and consumers are still cautions, according to the bank. Not all sectors are fully operational again, including the culture sector and travel sector. That will only be possible once there is a vaccine and many Dutch people have been vaccinated against the coronavirus, ABN Amro expects. And that will happen no earlier than halfway through next year. Until then, the economy will run only at 95 percent.

ABN Amro expects the economy will shrink by 5.6 percent and then recover by no more than 2.7 percent. Only in 2022 will the economy return to pre-coronavirus levels, according to the bank.