The Dutch economy has officially entered a recession as it contracted by 0.3% on a quarterly basis during the second quarter, according to an initial estimate released by Statistics Netherlands on Wednesday.
This marks the second consecutive quarter of contraction for the euro zone’s fifth largest economy, following a 0.4% decline in the first three months of the year.
In 2021 and 2022, the Netherlands experienced robust economic growth of almost 5% per year, showcasing a swift recovery from the COVID-19-induced downturn.
The first recession since the pandemic has been attributed to a decline in consumer spending and exports. Escalating inflation led to higher food prices and increased energy bills not only in the Netherlands but also in its trading partners. Consumer spending experienced a notable decrease of 1.6%, and exports were down by 0.7% compared to the first quarter of the year.
Although inflation in the Netherlands has decreased from its peak of 14.5% in September of the previous year, it remained relatively high at around 6% during the second quarter of 2023.
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