Netherlands: GDP contracts for third straight quarter in Q3
The economy contracted 0.2% on a seasonally adjusted quarter-on-quarter basis in Q3, improving from a 0.4% contraction in the second quarter but marking the third fall in a row. On an annual basis, GDP contracted 0.6%, compared with the previous period’s 0.2% contraction.
Household spending was flat in the quarter (Q2 2023: -1.7% s.a. qoq). Government spending expanded by 0.6% (Q2 2023: +0.8% s.a. qoq). Meanwhile, fixed investment contracted by 1.8% in Q3, down from the 0.3% increase logged in the prior quarter.
Exports of goods and services contracted by 1.6% on a seasonally adjusted quarterly basis in Q3, following a 1.2% fall in Q2. Additionally, the growth in imports of goods and services deteriorated, contracting by 2.3% in Q3 (Q2 2023: -0.3% s.a. qoq). Overall, given the reduction in imports, the net contribution of the trade balance was positive.
On a sectorial level, the contraction was mainly driven by declines in the energy and recreation sectors. Meanwhile, while manufacturing stagnated, mining and quarrying expanded strongly.
On the outlook for the economy, ING’s Marcel Klok commented:
“These third quarter figures don’t call for a big revision of our outlook. Despite the negative number for 3Q23, we do expect a bit of growth to return in the fourth quarter. […] That said, GDP growth is expected to remain below potential. We particularly expect the negative trend in investment to continue, given the weakness in the global business cycle and higher financing costs.”