Statistics Netherlands have reported that the Dutch economy shrank by 1,5 percent in the first quarter of this year, less than the 1,7 percent they initially predicted.

Coronavirus and the economy

The drop of 1,5 percent marks the first time the economy has shrunk in almost six years. The Netherlands locked down in mid-March, with businesses closing and travel to the country coming to an almost complete standstill. With people confined to their homes, there was a decline in consumer spending, which CBS cites as the main reason for the shrinking of the economy. 

According to Statistics Netherlands, investment in construction was higher than initially expected, and household spending increased again recently. These are the reasons the contraction wasn’t as high as expected.

New figures released show households across the country saved 4,2 billion euros more in the first three months of this year than they did in the same period in 2019. 

What does the future hold?

CBS does not provide predictions for what the second quarter might bring. However, the statistical office does report that the economic picture further deteriorated in June and that they expect the impact of the coronavirus to emerge more clearly in the second quarter of 2020.

The general business and consumer outlook has increased in June, in comparison to May, however, so on the whole people are feeling more positive about the future of the Dutch economy.