14.08.202015:48:00UTC+00Dutch GDP Falls Most On Record On Covid-19 Impact

The Netherlands' economy shrank at a record pace in the second quarter and entered a severe recession, due to the impact of the coronavirus, or Covid-19, pandemic, preliminary estimates from the Central Bureau of Statistics showed on Friday.

Gross domestic product decreased 8.5 percent sequentially after a 1.5 percent decline in the first quarter. Economists had forecast a 9.2 percent fall.

This is the largest quarterly decline on record and more than half of it was attributable to the nosedive in household consumption, while investments in fixed assets and the trade balance also decreased sharply, the CBS said.

Previously, the sharpest quarterly decline was 3.6 percent in the first quarter of 2009 during the global financial crisis.

Household spending dropped 10.4 percent and investments decreased 12.4 percent. Exports and imports fell 9.8 and 8.3 percent, respectively. Public consumption declined 3 percent.

Weakness in sectors such as trade, transport, accommodation and food services and storage as well as business services including travel services, and care all contributed significantly to the economic decline. In the health care sector, the lower productivity was mainly due to the fact that many health and care services were postponed or avoided during the Covid-19 crisis.

On a year-on-year basis, GDP fell 9.3 percent in the second quarter after a 0.2 percent drop in the previous three months. Economists had expected a 9.7 percent decline. The latest annual fall was also a record, surpassing the 4.6 percent decline logged in the second quarter of 2009.