Economic growth in the Netherlands is anticipated to be significantly slower than previously projected for the current year due to a recession in the first half of 2023, effectively concluding a robust post-COVID-19 recovery phase. This assessment comes from the Dutch government policy adviser CPB.

The projected growth rate for 2023 is now revised down to 0.7%, with an estimated 1.4% growth for 2024. This is in stark contrast to the remarkable 5% annual growth recorded in both 2021 and 2022, which characterized the nation's strong rebound from the pandemic-induced lockdowns.

Earlier in March, the CPB had forecasted a growth rate of 1.6% for 2023 and 1.4% for the following year.

During the first half of 2023, the Netherlands, which is the fifth-largest economy in the eurozone, entered a recession as its economy contracted by 0.3% in the second quarter, following a 0.4% contraction in the initial three months of the year.

Despite the occurrence of the first post-pandemic recession, its impact is predicted to be relatively moderate. The country's unemployment rate is anticipated to remain low at around 4%, and wage increases are likely to offset rising food prices and energy costs in the coming year.

On the other hand, inflation is expected to remain elevated throughout 2024, hovering at nearly 4%. This could potentially lead to an increase in the number of households experiencing poverty, estimated to reach 6% of the total population, as reported by the CPB.