Rabobank predicts a (mild) recession for the Dutch economy at the end of this year

Although the Dutch economy was still recovering strongly from the corona crisis, Rabobank economists predict a period of economic cooling in their quarterly study. The main reason for the expected small economic downturn is the current high inflation, which is pushing up domestic and foreign spending and investment. In addition, the bank states that growth in many Dutch sectors will decline at the end of this year due to, among other things, staff costs and worldwide disruptions in the supply chain.

Overall, Rabobank economists predict a GDP growth of 2.9% for 2022 as a whole and a decline of 0.2% for 2023. The Dutch economy is expected to contract slightly in the last quarter of this year and the first quarter next year. However, Rabobank expects the Dutch economy to grow again in the second quarter of 2023.

“In our estimation, we assume that the EU will impose a boycott of Russian oil from the end of this year,” explains Rabobank’s chief economist Ester Barendregt.

“We expect energy prices to remain high or even rise further as a result. We do not assume that in the short term the EU will include Russian gas in its sanctions package, nor that Russia will close the gas tap. We also do not assume that new corona measures will be introduced that will harm the economy. ” Barendregt argues that the economic picture should be downgraded if one (or both) of the stated scenarios come true.

History lesson

Barendregt also explains that history teaches us that a period of high inflation almost always leads to a cooling economy. “High inflation over a longer period of time erodes the purchasing power of households and can be at the expense of corporate profits. With a certain delay, this often leads to a recession. “

“Not only energy, but also more and more other products and services are currently becoming more expensive, including food and industrial goods.” Barendregt does not expect inflation to fall in the short term. Although wages are rising, it is not as fast as prices. The government’s measures to support purchasing power do not offset this loss either, according to the chief economist.

Unemployment remains low

In terms of unemployment, Barendregt expects the shortage in the labor market to keep it low at 3.3% (this year) and 3.5% (2023). “The number of vacancies may fall somewhat. But companies will be reluctant to let their staff go because they have recently found it difficult to find good employees. And people who lose their jobs may find jobs elsewhere pretty quickly. “

Rabobank economists also conclude that business investment is declining markedly. The main explanations for this, according to the chief economist, are general uncertainty about the economy, extreme labor shortages, “sky-high” producer prices, higher interest rates and tax arrears. On the other hand, the planned higher public spending and investment may provide some support to the economy in the coming period.


Not only long-term high inflation, but also staff shortages and ongoing disturbances in the value chains weigh on the growth forecasts for several sectors. Martin Boon, deputy director of Food & Agri, explains that entrepreneurs can pass on inflation, but it ultimately ends up with the consumer. “And many sectors will notice it, such as retail and hospitality.”

Boon states that businesses in business services and catering are particularly affected by the lack of staff. In addition, no less than a quarter of companies – especially in industry, wholesale and retail – would experience a shortage of raw materials and materials. According to Boon, the shortage has risen sharply in the past year and is now greater than before the corona pandemic.

“The lack of staff and materials makes it more difficult for companies to expand production and meet demand. In the short term, this is likely to hold back production and output growth. In the long run, companies will look for alternatives. They then automate tasks where possible and look for replacements for materials, ”says Boon.

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