The Dutch economy unexpectedly succumbed to its first recession since the pandemic on weakness in both consumer spending and exports.
Gross domestic product fell 0.3% from the previous three months between April and June, the statistics office said Wednesday. The result follows the first quarter’s 0.4% revised slide and falls well short of the 0.2% growth seen in a Bloomberg survey.
The Netherlands must now confront economic pain alongside the political upheaval sparked by the resignation of long-time Prime Minister Mark Rutte. Behind the downturn in the first half of 2023 are labor shortages, muted demand from European trading partners and steep rises in interest rates as the European Central Bank seeks to tame inflation.
“Stability and predictability are now needed, so we have to be careful not to disrupt the economy and also to increase taxes,” Economic Affairs Minister Micky Adriaansens told Dutch press agency ANP.
A breakdown of the data showed domestic consumption decreased by 1.6%, while exports shrank by 0.7% and government spending advanced by 0.7%.
--With assistance from Joel Rinneby and April Roach.
(Updates with comments from minister in fourth paragraph.)
