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Dutch economy shrank 0.2% in Q3 as inflation bites

Published 15/11/2022, 08:33
© Reuters. FILE PHOTO: People do their last Christmas shopping before The Netherlands will go into a tough second lockdown, amid the coronavirus disease (COVID-19) outbreak, in the city centre of Venlo, Netherlands December 14, 2020. REUTERS/Piroschka van de Wouw
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AMSTERDAM (Reuters) - The Dutch economy shrank 0.2% on a quarterly basis in the third quarter as rising interest rates slowed down the housing market and surging inflation put a brake on consumption, a first estimate released on Tuesday showed.

The euro zone's fifth largest economy performed worse than expected in the July-September period, as economists in a Reuters poll on average had predicted 0.0% growth.

Investments fell 1.7% as rising mortgage rates cooled the years-long boom in the Dutch property market, while consumption growth slowed to 0.1%.

© Reuters. FILE PHOTO: People do their last Christmas shopping before The Netherlands will go into a tough second lockdown, amid the coronavirus disease (COVID-19) outbreak, in the city centre of Venlo, Netherlands December 14, 2020. REUTERS/Piroschka van de Wouw

The Dutch economy was 3.1% larger than in the third quarter of 2021, when consumption was still limited by COVID-19 restrictions.

Economic growth is expected to drop to 1.5% next year from an estimated 4.6% in 2022, the government's economic advisory board said in September, as ballooning energy bills and the rising costs of living further limit consumer spending.

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