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2008.12.2306:48:00UTC+00Dutch Economy Remains Stagnated As Recession Looms

Tuesday, the latest report from the Dutch statistical office confirmed that the economy stagnated in the third quarter. The economy showed stagnation for the second quarter in a row.

Year-on-year, the Dutch economy grew at a pace of 1.8% in the third quarter, much slower than the 3% recorded in the previous quarter. According to the statistical office, 1.8% is the weakest growth since the start of 2005.

Thus, the preliminary estimates released on November 14 were confirmed.

Other data released by the statistical office on Tuesday showed that Dutch output priced dropped for the first time in five years. Factory gate prices fell more than 2% in November after rising more than 4% in the previous month. Month-on-month, prices were down nearly 5% in November.

Consumer spending rose 0.2% year-on-year in October and grew an average 2% in the first half of the year. The consumer confidence indicator slightly rose to minus 28 in December from minus 29 in the prior month.

Producers' confidence plunged 11 points to minus 20.1 in December, a record low. The agency noted that it was the largest monthly fall since the series began in 1985. The index had peaked in January, reaching its all time high of 9.5.

The Dutch economy is widely expected to slip into recession next year.

The economy is set to grow at a slower pace of 2.25% this year, after 3.5% expansion in 2007, the government-planning agency, Centraal Planbureau or CPB said on December 8. The CPB forecast a 0.75% contraction for next year.

On December 10, the Dutch central bank said the economy is expected to contract 0.5% in 2009 due to reduced business investment, consumer spending and a decline in export growth at the end of 2008. The central bank said it expects the Dutch economy to resume growth in 2010 by expanding 0.5% if the world economy recovers rapidly. If not, the apex bank said the economy will continue to shrink in 2010.

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