Netherlands: Economic activity contracts more than initially estimated
June 25, 2013
In the first quarter, GDP contracted a revised 0.4% in seasonally adjusted terms over the previous quarter (previously reported: -0.1% quarter-on-quarter), according to the second estimate released by Statistics Netherlands on 25 June. As a result, the economy remains in a technical recession following three consecutive quarters of contracting economic output.
The Q1 revision came mainly on the back of a downward adjustment to domestic demand. Private consumption added a softer 0.1% (previously reported: 0.4% qoq), while public spending dropped 0.7% in the first quarter (previously reported: -0.8% qoq). In addition, gross fixed investment plunged 7.4% over the previous quarter (previously reported: -5.6% qoq).
Meanwhile, the external sector also suffered downward revisions. Exports of goods and services expanded 0.1% (previously reported: 1.0% qoq), while imports contracted 1.8% (previously reported: -1.3% qoq). As a result, the contribution from the external sector to overall economic growth remained positive but decreased from the initial 1.8 percentage-point contribution to a softer 1.4 percentage points.
The government expects the economy to contract 0.5% in 2013. The Central Bank is more pessimistic and expects a 0.6% contraction in 2013 before expanding 1.0% in 2014. For 2013, FocusEconomics Consensus Forecast panellists see GDP contracting 0.8%, which is down 0.1 percentage points from last month's Consensus. For 2014, the panel expects the economy to expand 0.7%.