Economic growth of 3.1 percent in Q2 2021

by Arianna Ardia-Wenink
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According to the first estimate conducted by Statistics Netherlands (CBS), the Dutch economy grew by 3.1% in the second quarter of 2021. This economic growth was mainly due to increased household consumption after the lifting of the lockdown restrictions on shopping, travelling and eating out and a higher trade balance. Public consumption also increased, but investments decreased.

Households spent 5.7% more from the second quarter than in the first quarter of 2021. In addition, government consumption grew by 2.6%,  partly due to increased investment in healthcare and education and social security, as well as the cost of coronavirus tests and vaccines. Exports and imports of goods and services increased by 4.0 and 2.6% respectively.

In particular, the sector trade, transportation and accommodation and food services, the sector government, education and care and the manufacturing sector made positive contributions to the quarter-on-quarter economic growth.

 

GDP 9.7 percent up on Q2 2020

Figures from the statistics agency CBS showed the Netherlands went through a little recession in the first six months of 2020, with the economy flatlining in the first quarter and shrinking by 0.8% in the spring. The economy as a whole has still not recovered from the first pandemic shutdown, when it shrank by 8.4% in the second quarter of 2020. However, some sectors are back to 2019 levels.

According to the first estimate, GDP grew by 9.7% year-on-year, and is back at the level of June 2020.  This is the largest year-on-year growth ever. Household consumption and the trade balance were higher in particular. Investments and public consumption also made a positive contribution to growth.

The exceptionally high growth in the second quarter of 2021 is also mainly the result of a severe lockdown in the second quarter of last year, when GDP contracted sharply. The economy bounced back in the following period, but the contraction of that time has not yet been fully compensated. Compared to two years ago, the size of the economy in the second quarter of 2021 was still 0.4 percent smaller. Only public consumption and exports were higher in Q2 2021 than in Q2 2019.

 

More consumer and public consumption

In Q2 2021, consumers spent 9.3% more than in Q2 2020. This is largely thanks to to the re-opening of shops and services. Consumers spent mainly more on accommodation and food services, medical services, clothing.  However, household consumption has not yet returned to coronavirus levels before the Corona pandemic. Compared to the second quarter of 2019, household consumption was almost 5%lower.

Public consumption grew by 7.4 %. Public spending in the areas of health, education and social security grew strongly due to additional spending on testing and vaccinations.

 

More machinery, transport equipment and chemical products exported

Industry grew by more than 14%. The construction sector saw 5 percent growth.

Exports of goods and services in Q2 2021 were 14 percent up year-on-year. Exports of goods grew strongly. In particular, more machinery, chemical products and transport equipment were exported. Exports grew faster than imports, so the trade balance made a positive contribution to economic growth.

 

Cultural and recreation sector still less economically active

The cultural and recreation sector, that was hit hard by the closure of museums, concert establishments and sports clubs, is still clearly less economically active than in 2019.

The sector culture, recreation, sports and other services, achieved 11.1% more output in Q2 2021 than twelve months previously. Sports and recreation grew again, but the arts and culture sector still struggled with coronavirus restrictions and shrank again. For this sector too, pre-coronavirus levels are still a long way off.

Read the original article on the website of Statistics Netherlands (CBS).

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