Economy drops from boom to zero growth

24/12/2008 15:00

The Dutch economy dropped from a period of booming to zero growth in the course of 2008. Although economic growth was 2.7 percent on average in the first three quarters compared with the first three quarters of 2007, in the second and third quarters it did not grow at all. Exports remain the mainstay of Dutch economic growth, but are under pressure from the global economic setback. The growth in consumption by households is also slowing down. Investment spending remained high. 

Gross domestic product

Gross domestic product

It was an especially disastrous year for shareholders. The market value of Dutch shares on the Amsterdam stock exchange was cut by more than half in the space of less than a year. At the beginning of 2008 the total value of Dutch shares in Amsterdam was still nearly 700 billion euro, by the end of November is was only 333 billion euro. Falling share prices accounted for a loss of 280 billion euro, companies leaving the stock market for another 80 billion euro. 

Market value Amsterdam stock exchange, Dec 2007-Nov 2008

Market value Amsterdam stock exchange, Dec 2007-Nov 2008

Consumer confidence dropped dramatically in July 2008, especially as far as the economy was concerned. Willingness to buy also deteriorated considerably. The sentiment in the manufacturing industry plummeted a few months later. Manufacturers have never been as sombre as they are at the end of 2008, whereas they were more optimistic than ever at the beginning of the year. Companies in the business services sector, too, were extremely downcast. 

Consumer and producer confidence

Consumer and producer confidence

Source:

Economic monitor