Curated By: Business Desk
Last Updated: August 17, 2023, 11:29 IST
The Dutch economy slides into recession.
The economic growth of the Netherlands was 5% in the past two years, after a quick recovery from the pandemic.
The Dutch economy has entered a recession, with daily growth of 0.3% in the second quarter. The first estimate was published by Statistics Netherlands on Wednesday. The fifth-largest economy in the eurozone shrank for the second consecutive quarter after it had a diminution of 0.4% in the initial three months of the year. Economic growth had been 5% in 2021 and 2022 in the Netherlands, after a quick recovery from the Covid-19 pandemic. It experienced its first recession since the pandemic, as there was a drop in consumer spending and export business as inflation, food prices and energy bills were high in the Netherlands and its other trading partners.
It was reported that consumer spending fell by 1.6% while exports were 0.7% lower when compared to the beginning months of the year. Last year in September, inflation in the Netherlands dropped, hitting a peak of 14.5%, but was relatively high as it was around 6% in the second quarter of 2023.
The economies of the neighbouring countries of the Netherlands, which are France and Belgium, grew in the last quarter. The economies of European economic powerhouse Germany, another neighbouring country, remain stagnated.
The Economic Minister Caretaker, Micky Adriaansens, said in a recent interview with a portal that the foundation of the country’s economy will remain fine even after the effects of inflation and interest rate hikes on businesses and consumers. She further added that she wants to keep investing in the challenges coming in the long run and will keep an eye on how they can tackle the unnecessary price rises. The country is officially in recession, but the labour market remains strong, with an all-time low of 3.6% unemployment. There are 122 jobs for every 100 job seekers.
The reason behind the recession in the Netherlands is the political uncertainty after the resignation of the ruling coalition in the summer. A National election is scheduled for November, which will be followed by a long round of negotiations to form a new alliance.
