Friday, May 24, 2024

Economic Outlook Worsens Once Again, Dutch Economy Suffers Contraction

In a disheartening trend, the economic landscape of the Netherlands took another hit in April, showing grimmer prospects compared to March, as unveiled by the CBS Business Cycle Tracer. Statistics Netherlands (CBS) divulged that 10 out of the 13 indicators scrutinized in the Tracer for April slumped beneath their long-term averages.

The CBS Business Cycle Tracer acts as a vital barometer for gauging the Dutch economy’s health, amalgamating various statistics published by CBS to offer a comprehensive macroeconomic overview. Despite this, the economic scenario may diverge significantly across different demographics, enterprises, or regions.

April 2024 witnessed a slight improvement in the sentiments of Dutch consumers and producers compared to the preceding month. Nonetheless, confidence levels remained subdued, lingering below the long-term average prevalent over the past two decades.

Household spending registered a marginal decline of 0.3 percent in February compared to the previous year, after adjusting for inflation and shopping patterns. While expenditure on goods experienced a dip, spending on services saw a slight uptick.

The export sector faced a downturn in February 2024, with the total volume of exported goods plummeting by 3.6 percent year-on-year. Notably, exports of petroleum products, machinery, transport equipment, and food and beverages witnessed significant declines.

Investment in tangible fixed assets witnessed a downturn of 2.8 percent in February 2024 compared to the same period last year, primarily attributed to reduced investments in buildings and machinery, although investments in motor vehicles saw a modest rise.

The manufacturing sector endured a setback in February 2024, with output declining by over 2 percent compared to the previous year. However, the output showed a marginal increase of 1.4 percent in February relative to January, after accounting for seasonal variations.

March saw a marginal decrease of 2 percent in the number of bankruptcies compared to February. Nevertheless, the trend of rising bankruptcies has persisted for almost two years.

Meanwhile, house prices surged by over 5 percent in March 2024 compared to the previous year, continuing the upward trajectory. Additionally, the number of hours worked witnessed a slight uptick, while unemployment inched higher, and job vacancies continued to decline for the sixth consecutive quarter.

In conclusion, the second quarterly estimate for Q4 2023 reveals a modest economic growth of 0.4 percent, primarily driven by household consumption, marking a turnaround from three consecutive quarters of declining GDP.

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