The likelihood of the Netherlands entering a light recession has increased, and the big three Dutch banks have all downgraded their forecasts, the Telegraaf reported on Thursday.

Pieter Hasekamp, director of the government’s macro-economic forecasting agency CPB, told MPs on Wednesday that the agency’s earlier forecast of 1.6% growth this year has been overtaken.

“A light recession remains a real option,” he told parliament’s finance committee. “We did take a more somber scenario into account in the March forecasts and recent figures have made that more likely.”

The main problem facing the Dutch economy is weak exports, due to recession abroad, particularly in the first quarter, experts say.

The big three banks forecast earlier that the economy would grow between 1.2% and 2% this year, but have now revised their figures downwards.

ABN Amro economists still see minor growth in the second, third and final quarters of the year, but said on Thursday that overall growth will be no higher than 0.7% this year. The figure for 2024 has been revised down from 1.3% to 1%.

Rabobank, which also published revised figures on Thursday, puts growth at 0.6% this year and 0.9% in 2024.

ING, which revised its figures last week, puts growth at 0.4% in 2023, rising to 1.2%in 2024.

The government uses the CPB’s spring forecasts when compiling its 2024 spending plans. The next CPB update is due in the autumn.

The Dutch economy contracted by 0.7% in the first quarter of this year compared with the final three months of 2022, national statistics agency CBS said in May.