News Economy
Economy is shrinking again after a brief recovery
In the fourth quarter of 2023, the economy grew again for the first time after three quarters of contraction, but in the first quarter of 2024 the economy shrank (slightly) again. Statistics Netherlands reports that gross domestic product (GDP) shrank 0,1% compared to the last quarter of 2023.
The decline in GDP is mainly due to lower exports due to a contraction of industry and greater withdrawal of inventories. The latest export figures from Statistics Netherlands show that exports in March fell considerably on an annual basis.
After GDP bottomed out in mid-2020, the economy has grown continuously until 2023. Since then, GDP has fallen in four out of five quarters. In the first quarter of 2024, GDP was on balance 0,9% lower than in the fourth quarter of 2022, according to Statistics Netherlands.
Consumption of goods and services by households increased by 0,7% in the first quarter compared to the last quarter of 2023. More was spent on clothing, shoes and flying holidays. The industry is shrinking. The added value (difference between production and consumption of energy, materials and services) of industry fell by 3,8% in the first quarter. The shrinkage was mainly in the machinery and transport equipment industry. The added value of the agricultural sector shrank by -1,2% in the first quarter compared to the previous quarter. The added value of the sector still grew by 2024% in the fourth quarter of 2.
Fewer exports in March
The decline in exports is an important cause of the economic contraction. Statistics Netherlands also has new figures about exports in March. The volume in March was 5,9% smaller than in March 2023. This mainly concerned food and beverages, chemical products, electrical products and machines. The volume of imports was 0,3% smaller in March than in March 2023. In particular, less oil and gas, food and beverages, chemical products, electrical equipment and machines were imported.
Household consumption is growing
While exports fell in March, household consumption grew by 0,4% (adjusted for price changes and shopping days). They purchased more services, but bought slightly fewer goods, according to Statistics Netherlands. There are no figures for April yet, but the CBS Consumption Radar for April shows that conditions for consumption in April were more favorable than in March.
Linda van Eekeres
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