The economy shrank by 8.5 percent in the second quarter compared to the previous quarter, reports the Central Bureau of Statistics on the basis of first figures. More than half of the record decrease is due to households that spent less. Peter Hein van Mulligen, chief economist at Statistics Netherlands, calls the decline catastrophic.
It was already expected that the blow would be hard. The economy also contracted by 1.5 percent in the first quarter of this year, while January and February were still good months. The two-week lockdown in March was enough to eventually shrink the economy. The figures for the second quarter cover the months of April, May and June: two full months of which the Netherlands was in partial lockdown.
Statistics Netherlands has been keeping quarterly figures of economic growth since 1987. Never before has a decline been as great as the previous quarter. The previous low was in the first quarter of 2009, when the economy contracted by 3.6 percent from quarter to quarter.
The blow is greater in other European countries. In Germany, for example, the economy shrank by 10.1 percent in the second quarter, in Spain by 18.5 percent and in the United Kingdom by 20.4 percent. The contraction in the Netherlands was also smaller than the eurozone average.
Aid measures
Although the blow to the Netherlands has been historically significant, the shock has been cushioned by all the government’s support measures. In the second quarter, about 3 million people received income support from the government. Most of them, about 2.65 million people, were paid by their employer with wage subsidies. About 375,000 freelancers received a supplement to the social minimum.
Companies could also receive an allowance of 4000 euros for fixed costs. More than 200,000 companies made use of this in the second quarter. It is unclear what to expect for the Dutch economy when the support measures end.
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