If you couldn’t tell from the news about bankruptcies and inflation: the Dutch economy has been shrinking in the past two quarters. This means that the Netherlands has officially entered a recession.
The Central Bureau of Statistics (CBS) has found that the Dutch economy contracted by 0.4% in the first quarter of 2023 and 0.3% in the second quarter, reports the NOS.
But before you start panicking, take a second to breathe. CBS chief economist Peter Hein van Mulligen says there is no need to be worried over the scary “recession” word.
Just a “period of stagnation” — not a crash
There’s no need to adopt all the frugal Dutch ways just yet. This recession is not an economic crash with people fighting for jobs and companies falling bankrupt like dominoes. Rest assured: there are still more jobs available than unemployed people in the Netherlands.
Rather, this is just a “period of stagnation” of a growing economy, according to Van Mulligen.
Why the slowdown?
One of the main reasons for the sluggish growth is that people are spending less money compared to right after the COVID-19 pandemic. As soon as restrictions eased, people scrambled to catch up on missed holidays, shopping trips, and meals at restaurants.
And now? People are done making up lost time, and are back to keeping a close eye on their cash.
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Besides the relative dip in post-pandemic spending, a decline in Dutch exports has also contributed to the slowdown in growth.
In response to the numbers, the Dutch cabinet will now have to tip-toe the line between being an outgoing caretaker cabinet and still bringing enough stability to avoid falling off the economic cliff.
How do you feel about the news that the Netherlands has entered a recession? Tell us in the comments below!
