The Dutch economy contracted 0.3% in the second quarter of this year, putting the country into a light recession, national statistics agency CBS said on Wednesday.

The quarter on quarter contraction is the second in a row, following on from the 0.4% shrink in the first three months of the year. Two quarterly contractions means the Netherlands is officially in recession.

Economists polled by news agency ANP earlier in the week had said they expected slight growth.

The Netherlands recovered from the pandemic more quickly than its neighbouring countries but has now been overtaken by them, said CBS chief economist Peter Hein van Mulligen.

“In fact, the Dutch economy has hardly grown over the past four quarters, and this quarter fits in with that pattern,” he said. “It is a period of stagnation.”

The contraction is partly down to consumers spending less money which, in itself, is not a surprise, Van Mulligen said. The post coronavirus spending spree is now over, he said, and consumer spending fell 1.6% in the second quarter overall. In June, however, consumer spending was up 1%.

Corporate investments rose, but less was invested in building residential property in particular. Imports grew and exports fell – mainly affecting the chemicals industry.

The situation in the jobs market is largely unchanged and the number of vacancies still far outstrips the number of unemployed. The official jobless rate fell slightly in the second quarter to 3.5%.

Stability

“Stability and predictability are crucial at the moment,” said economic affairs minister Micky Adriaansens in a reaction. “That is why I want to continue to tackle the underlying issues, invest in the long term challenges and see what we can to to deal with unnecessary price rises.”

The cabinet will meet on Friday for the first time since the summer recess.

However, given the cabinet is acting in a caretaker capacity since the government collapse, the September budget will not include any major policy initiatives.