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Fears for Dutch economy after 'shock' reverse in growth figures

The Dutch economy is teetering on the brink of recession after figures for the third quarter of the year unexpectedly showed growth going into reverse.

Analysts reacted with shock at the 0.3% contraction in the size of the economy, which one commentator described as “totally unexpected”.

The trend has been attributed to a 1% drop in household spending. Consumer confidence is at its lowest level since March 2009, and as the government seeks a fresh round of budget cuts in the new year the fear is that the country is on the road to recession.

The figures also show that in the last 12 months 15,000 jobs have been lost in the public sector.

The preliminary figures were produced by the Central Statistical Office (Centraal Bureau voor de Statistiek).

Maarten Schinkel, economic commentator for NRC, said: “These figures are totally unexpected. Only last week the Nederlandsche Bank produced an economic model for the short term which predicted quarterly growth of 0.2% in the third quarter.”

Year-on-year figures slowed to 1.1%, compared to 2.8% in the first quarter of the year, suggesting that the economy is running out of fuel.

The Dutch figures stand in sharp contrast to Europe’s two largest economies, France and Germany, where gross domestic product grew in the third quarter by 0.5% and 0.4% respectively. In the wider eurozone growth was 0.2%.

The last time the Dutch economy shrank from one three-month period to the next was the second quarter of 2009. 

Deputy prime minister and economic affairs minister Maxime Verhagen said: “The trust of business leaders and consumers has taken a heavy knock. We will start to feel that in the coming months. The economy is on an amber signal.”

Source: NRC: Nederlandse economie krimpt – ‘schokkend, totaal onverwacht’

Photo by mooste

See also: Centraal Bureau voor de Statistiek (in English)