Partial lockdown to cause wave of bankruptcies: ABN Amro

The partial lockdown the government implemented on Wednesday to try and get the spread of the coronavirus under control, will mean bankruptcy for many companies, ABN Amro economist Philip Bokeloh expects. "There is no other outcome than the number of bankruptcies increasing," he said.

The lockdown includes catering establishments closing for everything except takeaways, limits on alcohol sales, and no more than 30 people allowed in many public places like theaters. These measures will undoubtedly be a blow to the economy, Bokeloh said.

So far, thanks to government support packages, the number of bankruptcies in the Netherlands have been limited. Many entrepreneurs thought the lockdown measures were a temporary interruption and decided to push through the hard times.

"Now they are finding that they have to deal with these problems for longer, which makes their prospects more bleak," Bokeloh said. The cabinet is also gradually decreasing its emergency support to companies. "Perhaps the cabinet will take additional measures. After all, elections are coming up. But that addition will only apply to a few industries."

While this second lockdown will definitely be an economic blow, Bokeloh does not expect it to be as bad as in the first coronavirus wave - in the second quarter the Dutch economy contracted an unprecedented 8.5 percent. "It won't be that bad this time."

"You saw that then both the demand for products and their production got into trouble," he explained. "This time only consumer demand will decline. Moreover, demand from other countries remains reasonably stable."

ABN Amro lowered its economic expectations for this year and next year, though it still expects some economic growth next year. "We expected a strong recovery in the second half of this year, but that will be less now. And that will also have an effect on next year.