Coronavirus and the Dutch economy: The worst is over
Figures released by Statistics Netherlands (CBS) show that, while the most recent coronavirus lockdown had a significant impact on the state of the Dutch economy, the worst is behind us. Experts believe the economy will be able to recover this year.
The effect of coronavirus on the Dutch economy
The first three months of 2021 saw the Dutch economy shrink by 0,5 percent, marking the second quarter in a row in which the economy contracted, and thus sending the Netherlands into an official recession. This is the second official recession since the first coronavirus case was recorded a year ago; after last spring the economy grew spectacularly over the summer months.
Consumer spending fell by 3,5 percent in the first quarter of this year compared to the end of 2020. Compared to this time last year, CBS reports a 8,5 percent drop in consumer spending.
Unemployment continues to fall
In spite of this, CBS reports that unemployment continued to fall in the first three months of this year. While the number of job vacancies increased in Q1 compared to Q4 of last year, there were still only 73 jobs available for every 100 members of the working population.
The hospitality industry marked the largest increase in vacancies, with 6.000 jobs available at the end of March. "It seems that entrepreneurs, even in the hospitality industry, see bright spots", says Peter Hein van Mulligen, chief economist at CBS.
The number of people out of work fell by 50.000 in comparison to the end of 2020. At the start of last year, 277.000 people were unemployed. This figure rose to 419.000 last summer, but has since fallen again to 334.000. The salaries of approximately 1,3 million people were paid by the Dutch government’s NOW scheme.
CBS: There's light at the end of the tunnel
In the same way that medical experts say that the worst of the pandemic is behind us, it appears as though the worst periods for the Dutch economy are also in the past. “The economic picture is improving and the recovery period is beginning,” says Van Mulligen. "There seems to be light at the end of the tunnel for many entrepreneurs."
The contraction experienced in the first quarter was smaller than what had been predicted by the Dutch Central Bank (DNB), and both the DNB and Central Planning Bureau expect the economy to recover this year, but note that this will depend on the success of the vaccination campaign.