The Dutch economy will bounce back from the coronavirus crisis ‘strongly and smoothly’, the Dutch central bank says in its new economic forecast.

This year, the economy is set to grow 3%, to be followed by 3.7% in 2022, the central bank said. By 2023, it will normalise again, showing growth of an estimated 1.9%. The bank is basing its forecasts on the vaccination programme which is leading to measures to limit contacts between people being phased out.

This, the bank said, means consumer confidence will recover on a wide scale, driven partially by low unemployment. Unemployment will, however, rise from 3.6% this year to 4.5% in 2022 as more people join the labour market looking for work.

Earlier forecasts were less optimistic about the growth and recovery. ‘But the economy’s ability to adapt would appear to be greater than thought, and world trade is also performing better than expected,’ director Olaf Sleijpen told broadcaster NOS.

The Dutch economy has performed better than the EU general, contracting by 3.4%, compared with a eurozone’s 5.1% in the first three months of this year. This is partly due to the fact that the Dutch economy is not as reliant on tourism as that of Spain or France.

House prices too are contributing to the growth, and the central bank expects them to rise by 10% this year, followed by 5.5% in 2022 and 3.5% in 2023.

Next government

The central bank notes that public finances are under control and austerity measures or higher taxes are not necessary at the moment.

This means the next government, Sleijpen said, must focus on structural issues which were problems before the pandemic, such as the shift away from natural gas and bottlenecks in the housing and labour market.