The Netherlands MarketBeat

The economic outlook in 2023 differs significantly from last year in several ways. According to the Netherlands Bureau for Economic Policy Analysis, economic growth for the entire year is projected to be 0.7%, which marks a shift from the high post-pandemic recovery growth of the past two years. During this period, the Dutch economy has performed strongly and demonstrated its resilience and adaptability. Despite a pandemic, rising inflation, an energy crisis and ten interest rate hikes, the economy has shown flexibility and resilience. In other words, it has proven its ability to quickly adapt to the challenges of recent times. 

The economic consequences of structurally higher inflation and the associated interest rate hikes are becoming evident this year. The Dutch economy is currently experiencing a mild recession, as the last two consecutive quarters have shown negative growth of 0.4% and 0.2% for the first and second quarters of 2023, respectively. With the prices of almost all goods and services rising due to high energy prices, purchasing power is declining, and consumer spending is being squeezed. Industrial production has declined significantly since its peak in April 2022. The contribution to economic growth from exports and business investments in the Netherlands is being dampened by a cooling global trade, sharply rising interest rates, and ongoing geopolitical tensions, such as the ongoing war in Ukraine and the recent escalation in the Palestinian-Israeli conflict. 

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