Dutch economy saw biggest contraction since WWII in 2020
The Dutch economy shrank by 3.8 percent last year, the largest contraction measured since the Second World War, Statistics Netherlands reported based on the currently available figures on Tuesday. In 2009, the first full year of the credit crisis, the economy shrank by 3.7 percent.
The biggest blow to the economy happened in the second quarter of 2020, when the economy shrank an unprecedented -8.5 percent compared to the previous quarter. That was immediately followed by the largest growth ever measured at +7.8 percent. In the last quarter of the year, the economy stabilized, ultimately resulting in a full-year contraction of 3.8 percent.
The contraction is largely due to consumers spending considerably less, -6.6 percent compared to 2019. They spent less on the hospitality industry, travel, clothing, and cultural events – all sectors majorly impacted by the coronavirus and its accompanying lockdowns. Consumers spent more on food, home furnishings and electrical appliances.
The hospitality industry was hit hardest by the pandemic last year. The sector contributed 41 percent less to the economy than the year before. The culture, recreation, sports and other services sector contributed 24.5 percent less, due to festivals, sports matches and theater performances being canceled for most of the year.
The imports and exports of goods and services also contributed less to the economy, although this was relatively limited at -4.5 percent and -4.3 percent respectively. This was partly due to fewer foreign tourists visiting the Netherlands, and less trade in means of transport and oil products.
Notably, the lockdown introduced in the last quarter of 2020 did not have a major effect on the economy, the stats office said. Restaurants and bars had to close in October, followed by non-essential stores in mid-December. Although this had a major impact on the affected sectors, the economy as a whole shrank by only 0.1 percent compared to the previous quarter.
Statistics Netherlands stressed that these figures are based on the figures currently available, and added that the calculations are more uncertain than in other years due to the the unprecedented circumstances surrounding the coronavirus pandemic. The stats office will publish a second calculation on March 26.