With weak consumer spending and export earnings, the Dutch economy has entered its first recession

Amid feeble consumer expenditures and dwindling export earnings, the Dutch economy has plunged into its first recession since the onset of the pandemic.

According to Bloomberg, data from the statistics office reveals a contraction of 0.3 percent in the gross domestic product during the preceding three months spanning April to June. This outcome follows a downwardly revised 0.4 percent decline in the first quarter, a stark contrast to the projected 0.2 percent growth outlined in a Bloomberg survey.

The Netherlands has been grappling with both political unrest and economic challenges since the departure of long-standing Prime Minister Mark Rutte. Labor shortages, feeble demand from European trading partners, and notable hikes in interest rates as the European Central Bank endeavors to manage inflation have collectively contributed to the downturn witnessed in the initial half of 2023.

Economic Affairs Minister Micky Adriaansens emphasized the need for stability and foresight during these times, stating, “Stability and predictability are now needed, so we have to be careful not to disrupt the economy and also to increase taxes,” as quoted by Bloomberg in an interview with the Dutch press agency, ANP.

Upon dissecting the statistics, an analysis unveiled that although exports managed a modest growth of 0.7 percent and government spending experienced a similar increase, the core of the recession was driven by a significant domestic consumption decline of 1.6 percent.