Low Growth and Covid Recovery in the Netherlands: A Revised GDP Outlook

Covid recovery even stronger than originally estimated thanks to a stronger current account

National accounts data for the Netherlands were revised considerably, partially changing the narrative of the Covid experience for the Dutch economy. While the Covid trough in GDP in the second quarter of 2020 was a bit deeper than initially thought, GDP has been revised significantly upward. The quarterly figures for 2021, in particular, were revised higher, resulting in a GDP level in the first quarter of 2023 that was 1.7% higher than previously estimated. International trade was revised upwards strongly. The goods trade balance was an important contributor to the GDP revision. Consumption by households and inventories was also revised upwards, while public consumption was revised down a little.

The revisions made the contraction at the start of this year appear more modest: the quarter-on-quarter growth rate for the first quarter was revised from -0.7% seasonally adjusted to -0.3%. All this means that GDP was 6.7% higher in the first quarter of 2023 than in the fourth quarter of 2019, just before the pandemic. This makes the GDP development of the Netherlands since the start of the pandemic stand out even more in comparison to its peers. In addition, gross national income was revised strongly due to upward revisions of the balance of primary income. This was mostly the result of large upwards revisions of (retained) profits of listed companies.