Dutch economy to shrink 0.2 percent in 2009

27 November 2008

THE NETHERLANDS – According to the latest report on the global economy by the Organisation for Economic Cooperation and Development (OECD), the Dutch economy will shrink by 0.2 percent in 2009.

It is the first time that the Dutch economy has shrunk since 1982.
 
Earlier reports by the OECD, as well by as the International Monetary Fund and the Netherlands’ Bureau for Economic Policy Analysis, had predicted modest growth but the recent panic on the financial markets has had a knock-on effect on Western economies, including the Netherlands.

Despite the sombre prediction, the Netherlands is still better off than most other countries in the euro zone; most euro zone nations will see their economies shrink by 0.6 percent.
 
The global economic malaise is beginning to make its impact on Dutch companies and industry.

Statistics Netherlands (CBS) says that producer confidence dropped to its lowest level in five years in November.

Temporary employment agencies – traditionally the first to profit from economic good times but also the first to suffer during the lean years –  have seen their profits drop since June.

Software and IT companies have also warned that profits are set to fall as many companies are postponing investment in new technology.
 
Consumer confidence, which has been falling steadily since the summer of 2007, fell again in November.

The CBS says the general economic climate is denting consumer confidence but that most people’s real concern is their own financial situation. Most people are putting off making major purchases and thinking twice about making minor ones.

CBS economist Michiel Vergeer says: "There has been a significant reduction in purchasing over the last two months" and summed up the national mood as: "the pessimists are in the majority".
 
[Radio Netherlands / Expatica]