Swift recovery of Dutch economy expected after COVID-19 crisis
Following a historical contraction in gross domestic product (GDP) of 3.7% in 2020, the Dutch economy is expected to recover strongly and rapidly, starting in the second quarter of 2021. GDP is expected to have grown by 3.0% in 2021, 3.7% in 2022 and 1.9% in 2023, on the assumption that the social distancing measures will gradually be relaxed further, and that they will no longer be necessary by 2022. Based on our projections, by the end of 2021 GDP will be higher than just before the pandemic, and the economy will recover much faster than after the 2008 financial crisis.
If support measures are scaled back after the third quarter of 2021, employment will initially decline slightly, only to pick up significantly over the course of 2022. At the same time, the improved economic outlook will prompt many more people to look for work. Unemployment is expected to rise as a result, from 3.6% in 2021 to 4.5% in 2022. As the economy recovers further, unemployment should fall back to 4.1% in 2023. Inflation is projected to go up from 1.1% in 2020 to 1.5 % in 2021, due to higher oil prices. Inflation should remain at 1.5% in 2022 and rise to 1.8% in 2023, in line with increasing labour market tightness.