Netherlands: Economy falls back into recession
February 15, 2012
In the fourth quarter, GDP contracted 0.7% in seasonally adjusted terms over the previous quarter. As this follows the revised 0.4% decline seen in the third quarter (previously reported: -0.3% quarter-on-quarter), the economy is now officially in recession. The reading was worse than market expectations that had the economy contracting a softer 0.3%, and marked the deepest contraction since the second quarter of 2009. On an annual basis, the economy also contracted 0.7%, down from the 1.1% expansion registered in the third quarter. For the full year 2011, the economy grew an estimated 1.2%, slower than the 1.7% expansion recorded in 2010. Gross fixed investment contracted 1.0% over the previous quarter, which came on top of a 1.1% decline in the July-September period. Simultaneously, total consumption contracted 0.3%, unchanged from the previous quarter, as both private consumption and government consumption contracted 0.6% and 0.1% respectively. The contribution of the external sector to growth deteriorated somewhat, as imports outpaced exports. Exports of goods and services stepped up from a 0.9% contraction in the third quarter to a softer 0.1% decline in the fourth, while imports swung from a 1.6% decline in the third quarter to a 0.2% expansion. The government expects the economy to contract 0.5% this year.