High inflation and rising interest rates are putting pressure on the Dutch economy, which will eventually lead to a recession. That’s what economists expect from ABN AMRO, but they think the recession won’t last long. For the whole of next year, they expect the economy to grow by half a percentage point.
Inflation will weaken sharply next year to 3.7%, economists predict. This is because energy prices will not continue to rise, partly due to the government-imposed ceiling. However, high energy, material and wage prices are reflected in the prices of more and more products and services. This makes it more difficult to bring inflation down quickly.
As wages also continue to rise and the government is capping energy costs, consumers will start spending more next year starting in the second quarter. Throughout the coming year, ABN AMRO economists continue to think consumer spending will be slightly lower.
Interest rates in the Eurozone, currently at 1.5 percent, will be raised further in the fight against inflation. ABN AMRO expects interest rates to peak at 2.5%.
Economic inequality
Economic inequality between the regions of our country is growing. Where the strongest areas, such as the Brainport Eindhoven technology region and Greater Amsterdam, continue to grow, the already lagging regions sink further. This is also the case in the north of the Netherlands. Rabobank expects this in its new regional economic forecast, according to the CEO.
For next year, the bank assumes national growth of ‘only’ 0.6 percent and 1 percent for 2024. This is significantly lower than this year (4.2%). The differences between the regions of our country are great. The vast majority of the forty regions are unlikely to grow, a quarter can even expect a contraction.
Regions where industry and commerce are overrepresented are particularly affected. This includes Alkmaar and the surrounding area, Leiden and the surrounding area, Drenthe and Friesland. “In Alkmaar, for example, trade is an important sector and as this sector is shrinking, we also expect a contraction for the region,” explains regional economist Floris Jan Sander of Rabobank.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
