According to the latest financial forecasts published by ABN AMRO, the significant growth the Dutch economy has experienced over the past several months will not be enough to prevent a “mild recession” before the end of the year.
While the Dutch economy grew by 2,6 percent in the second quarter of this year, the high rate of inflation, coupled with the rising cost of energy and the risk of gas shortages this winter means the Netherlands is headed towards what is likely to be a “mild recession,” the prominent Dutch bank predicts.
So far this year, the Netherlands has seen its economy bounce back surprisingly well in the wake of the coronavirus pandemic, outperforming its European neighbours. However, by the end of the year, ABN AMRO expects that “economic growth will decline sharply and there will even be a slight contraction.”
“Increased energy prices and weak business and consumer confidence are reasons for our new forecasts to include a major recession for the eurozone, regardless of whether actual energy shortages emerge,” ABN AMRO writes. Recessions are also expected to affect the United States and the United Kingdom, with the bank noting that economic slowdown across the eurozone will severely impact Dutch exports.
“Fortunately, there are also positive developments that will reduce inflationary pressures in the long term,” the latest forecast goes on to say. “The ongoing problems in international supply lines are receding [and] we will see an improvement of the ABN AMRO global supply bottlenecks index.”