Netherlands: Economy in recession for the fourth consecutive quarter
August 14, 2013
In the second quarter, GDP contracted 0.2% in seasonally adjusted terms over the previous quarter, according to the first estimate released by Statistics Netherlands on 14 August. The reading was below market expectations of a 0.1% drop but marks an improvement over the 0.4% fall recorded in Q1. Nonetheless, the economy remains in a technical recession amid four consecutive quarters of contracting economic output.
The Q2 contraction came primarily on the back of a reduction in domestic consumption. Private consumption dropped 0.8% in the second quarter (Q1: -0.1% quarter-on-quarter), whereas government consumption exhibited a flat growth rate (Q1: -0.4% qoq). On the other hand, gross fixed investment rose 1.1% over the previous quarter (Q1: -6.2% qoq).
The external sector's contribution to overall economic growth was positive, rising to 0.3 percentage points. The increase was, however, well below the 1.9 percentage point rise in the previous quarter. The result was mostly due to an increase in imports of goods and services, which rose 0.1% in Q2 (Q1: -2.5% qoq). Exports of goods and services improved slightly, rising from 0.1% in the first quarter to 0.4% in the second.
The government expects the economy to contract 1.25% in 2013. The Dutch Central Bank is less pessimistic and expects a 0.8% contraction in 2013 and a 0.5% expansion in 2014. For 2013, FocusEconomics Consensus Forecast panellists see GDP contracting 0.5%, which is down 0.1 percentage points from last month's Consensus. For 2014, the panel expects the economy to expand 1.0%.