Dutch economy growth forecast for 2023 reduced from 1.8 to 0.5 percent | Economy

The committee scales back the growth estimate for the entire eurozone. Heavyweight Germany in particular, where the economy is expected to shrink by as much as 0.4 percent this year, is to blame for this. According to the committee, the entire eurozone will grow not 1.1, but 0.8 percent in 2023. The expectation for next year is also lowered by three-tenths of a percentage point, to 1.3 percent. Roughly speaking, the same applies to the entire EU.

The more pessimistic view of the Netherlands is mainly due to the first half of 2023. The Dutch spent less money due to high inflation and exports declined at the same time. Because many wages have now been significantly increased and inflation is gradually decreasing (partly due to less sky-high energy prices), consumption will not fall further in the second half of the year, the committee expects. According to her, inflation will be 4.7 percent this year and 3.0 percent in 2024.

Growth will pick up again next year because purchasing power will partly recover and exports to the most important trading partners will increase again. The economy also benefits from government investments in defense and the transition to a sustainable economy, the EU executive estimates.

European economic growth is suffering from high inflation and the interest rate increases by the European Central Bank that are intended to combat inflation, the committee notes. High prices ‘take a greater toll than expected’, but companies also find it more difficult to obtain credit due to high interest rates.

At the same time, unemployment is still exceptionally low, energy prices are falling and wages are rising. That is why the committee is counting on a ‘mild rebound’ in growth next year.