NETHERLANDS: With daily growth of 0.3% in the second quarter, the Dutch economy entered a recession. Statistics Netherlands released the first estimate on Wednesday.
For the second consecutive quarter, the fifth-largest economy in the eurozone experienced a contraction, with a decrease of 0.4% in the first quarter of this year. Following a rapid rebound from the COVID-19 pandemic, the Netherlands witnessed economic growth of 5% in both 2021 and 2022.
However, the country now faces its first post-pandemic recession due to decreased consumer spending and export activity, triggered by elevated inflation, higher food prices, and increased energy costs in the Netherlands and its trading partners.
Reports showed that consumer expenditure experienced a decline of 1.6%, while exports witnessed a 0.7% decrease in comparison to the initial months of the year.
In September of the previous year, the Netherlands saw a significant drop in inflation, reaching a peak of 14.5%, but it remained relatively elevated, hovering around 6% during the second quarter of 2023.
The economies of the Netherlands’ neighbours, France and Belgium, expanded in the most recent quarter, while the economies of European economic powerhouse Germany, another neighbouring nation, stayed stagnant.
In a recent interview with the media, the Caretaker Economic Minister, Micky Adriaansens, stated that despite the impact of inflation and interest rate hikes on businesses and consumers, the fundamental stability of the country’s economy will persist.
She added that she wants to continue making investments in long-term difficulties and that she would monitor strategies for addressing unjustified price increases.
Although the country is currently experiencing a recession, the labour market remains robust, boasting an unprecedentedly low unemployment rate of 3.6%, with 122 available jobs for every 100 job seekers.
The recession in the Netherlands stems from the political instability caused by the ruling coalition’s resignation during the summer. A national election was set for November, followed by a prolonged period of negotiations to establish a new alliance.
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