Economy shrinks by post war record (update)

The Dutch economy shrank by 2.8% in the first three months of this year compared with the final quarter of 2008, the national statistics office CBS said on Friday.

The decline, the biggest ever recorded, is much sharper than had been expected. Year on year, the economy shrank by 4.5%, the biggest decline since World War II, the CBS said.
Both exports and investments were hard hit and it was the first time in years that household spending has gone down. Over the border in Germany, Holland’s most important trading partner, the economy shrank by 6.7% in the first three months of the year.

Nevertheless, government spending rose and the number of jobs was up by 30,000 year on year, the CBS said. There were fewer jobs in the first quarter compared with the last three months of 2008.
The CBS also said the number of job vacancies is continuing to decline, with a drop of 50,000 in the first three months of this year, compared with the final quarter of 2008.
By the end of March, there were 152,000 vacancies on the Dutch jobs market.
The Dutch unemployment rate is currently 4.4% but forecast to rise to around 10% next year.
‘We are long not out of trouble,’ said economic affairs minister Maria van der Hoeven in the NRC. But that is why the government has taken extra steps to combat the crisis, such as investing in construction and the infrastructure, she said.
Labour, Socialist and GroenLinks MPs all told the NRC they are extremely concerned. GroenLinks MP Jolande Sap told the paper it was clear the economy was being far harder hit than forecast and that extra measures would be necessary.

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