Netherlands: Economy stalls in second quarter
August 16, 2011
In the second quarter, GDP grew a modest 0.1% in seasonally adjusted terms over the previous quarter, according to the first provisional estimate released by Statistics Netherlands (CBS, Centraal Bureau voor de Statistiek) on 16 August. The reading came in below the 0.8% expansion tallied in the previous quarter and market expectations that had the economy growing 0.3%. On an annual basis, the economy increased 1.5%, down from the 2.8% expansion registered in the first quarter. The moderation was mostly the result of a weaker domestic sector. Fixed investment contracted 1.8%, which contrasted the robust 7.7% expansion recorded in the first quarter, while inventories increased at a slower pace than in the previous quarter. In contrast, total consumption swung from a 0.4% contraction in the previous quarter to a 0.2% expansion, mainly as a result of stronger government spending, whereas private consumption contracted 0.1% (Q1: -0.2% quarter-on-quarter). Meanwhile, growth in exports picked up to 1.9%, almost double the 1.0% observed in the previous quarter. In contrast, imports moderated the pace to a 1.6% expansion, down from the 2.5% increase in the first quarter. As a result, the net contribution from the external sector to overall growth improved from minus 0.9 percentage points in the first quarter to plus 0.4 percentage points in the second quarter. The Central Bank expects GDP to grow 1.6% in 2011 and 1.7% in 2012.