The eurozone's fifth largest economy unexpectedly entered recession

The Netherlands – the eurozone's fifth-largest economy – has unexpectedly fallen into its first recession since the pandemic due to weakness in both consumer spending and exports.

The gross domestic product (GDP) of the founding member of the European Union (EU) shrank by 0.3% in the second quarter compared to the previous quarter, the Central Statistics Office (CBS) said on August 16. The Netherlands' GDP had shrunk by 0.4% in the first quarter. Two consecutive quarters of GDP decline are defined as a "technical recession".

The Netherlands is now facing economic pain alongside political turmoil following the decision to quit politics by Prime Minister Mark Rutte, who has led the government in Amsterdam since October 2010 and is the longest-serving prime minister in Dutch history.

Behind the Netherlands' first-half 2023 recession are labor shortages, falling demand from European trading partners and sharp interest rate rises as the European Central Bank (ECB) seeks to tame inflation.

“Stability and predictability are now essential, so we have to be careful not to disrupt the economy and also raise taxes,” Economy Minister Micky Adriaansens told Dutch news agency ANP.

Analysis of second-quarter data showed that domestic consumer spending fell 1.6% from the first quarter, while exports fell 0.7% and government spending rose 0.7%.

Inflation in the Netherlands has fallen since peaking at 14.5% in September last year, but remains relatively high at around 6% in the second quarter of 2023 .

Minh Duc (According to Reuters, Bloomberg)

Source: https://www.nguoiduatin.vn/nen-kinh-te-lon-so-5-khu-vuc-dong-tien-chung-chau-au-bat-ngo-suy-thoai-a621999.html