Netherlands: Economy contracts in the third quarter
November 12, 2010
In the third quarter, gross domestic product decreased a seasonally adjusted 0.1% over the previous quarter, according to the data released by Statistics Netherlands (CBS, Centraal Bureau voor de Statistiek). The result was rather unexpected, as the previous four quarters registered positive economic growth. The reading came in below the 0.9% increase registered in the second quarter and was below market expectations of a 0.5% expansion. On an annual basis, the economy expanded 1.8% in the third quarter, which was down from the 2.2% growth recorded in the previous quarter. The economic decline was primarily driven by the domestic sector. A slight increase in private consumption (Q3: +0.1% quarter-on-quarter; Q2: -0.1% qoq) was not enough to offset a 2.0% contraction in gross fixed investment (Q2: +3.4% qoq). Exports expanded 1.1% over the previous quarter (Q2: +2.3% qoq), while imports declined 1.0 percentage points (Q2: +3.5% quarter-on-quarter). Central Bank president Nout Wellink expressed concerns that the economy remains fragile. Consensus Forecast panellists anticipate the economy to grow 1.9% in 2010, which is unchanged from last month's forecast. In 2011, panellists anticipate economic growth to slowdown to 1.7%.