Netherlands Economic Forecast

Netherlands Economic Outlook

September 1, 2020

The economy contracted steeply in Q2 due to the Covid-19 pandemic and associated restrictions dragging heavily on both domestic and foreign demand. Consequently, the economy entered its first recession since H2 2012. National accounts data showed that the downturn was broad-based, although private consumption and capital expenditure fell particularly hard. Turning to the third quarter, the economy is expected to exit the recession as containment measures have been eased, but available data paints a mixed picture. In July, operating conditions in the manufacturing sector continued to deteriorate, albeit at a reduced pace, while business confidence rose but remained deeply pessimistic. Moreover, consumer sentiment deteriorated in July–August compared to the prior quarter’s average, amid a further uptick in the unemployment rate in July.

Netherlands Economic Growth

The steepest economic recession since World War II is expected for this year. The Covid-19 pandemic and containment measures will drag on trade and manufacturing, while the services sector is set to suffer amid weak sentiment and softer aggregate demand. However, fiscal stimulus should cushion the fall somewhat. A recent surge in cases poses a downside risk. FocusEconomics Consensus Forecast panelists project the economy to contract 5.5% in 2020, which is up 0.2 percentage points from last month’s forecast, before growing 4.0% in 2021.

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Netherlands Facts

Value Change Date
Bond Yield-0.065.70 %Jan 01
Exchange Rate1.120.65 %Dec 31

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