Good news from Holland

Published on 16 November 2021 in Partner meeting

The Dutch economy has recovered from the blow of the corona pandemic. In the third quarter, the economy grew 1.9 percent compared to the three months before, surpassing the pre-corona crisis level for the first time. This is evident from figures from the Central Bureau of Statistics (CBS) on Tuesday.

The question is whether the recovery will continue this quarter, now that lockdown measures have been put in place again.

The economic growth in the past quarter was mainly due to people spending much more money. Their spending increased by 3.8 percent. In the months of July, August and September, the Netherlands only had limited lockdown rules, which meant that there were more opportunities to spend money.

People mainly spent more on culture, recreation, clothing and in the hospitality industry. This was possible because bars, restaurants and shops were allowed to stay open longer. In addition, people were able to visit sports competitions and events again and we went on more trips and days out. However, consumption has not yet returned to pre-pandemic levels.

Government spent more money on corona tests
The government also spent more. This increase was mainly due to more corona spending, for example by increasing testing capacity and purchasing self-tests. More is also spent on vaccinations. In addition, the import and export of goods and services grew.

That the economy went well in the past quarter is also apparent from figures on the labor market. On Tuesday it turned out that there are more people than ever at work: more than eleven million. At the same time, a record number of vacancies are open. Many sectors are therefore faced with a major shortage of personnel. The hospitality industry in particular is desperate for new employees.

Companies actually invested less
Contrary to all the good news, companies actually invested less in the past quarter. It also appears that construction and industry performed less well between the beginning of July and the end of September than in the three months before.

With a growth of 1.9 percent, the Netherlands performed slightly less well in the past quarter than the EU average of 2.1 percent. But in the preceding quarters, our country was a positive outlier. This makes the Netherlands one of the few countries that is already above the pre-corona level. Many other EU countries have not yet achieved this.

Consequences of new lockdown still uncertain
Due to the rapid increase in the number of corona infections, the outgoing cabinet recently decided to reintroduce contact-limiting measures. For example, supermarkets and other shops have to close earlier, just like the catering industry. There is also no public allowed at sports competitions.

Statistics Netherlands cannot yet say what the economic consequences of this will be. “But we have seen that the Dutch economy has often positively surprised during the corona crisis,” said Peter Hein van Mulligen, chief economist at the statistical office. He said that could now happen again. “But we don’t know for sure.”

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