Netherlands: coronavirus economic impact 2020-2021

The economic consequences of COVID-19 in the Netherlands worsened between initial outlooks in March 2020 and the latest one from June 2020. This according to possibly the most important of five sources in the Netherlands who presented economic outlooks, as the numbers provided here come from an official body that is used by the Dutch government to calculate their policies. Originally, this CPB or Netherlands Bureau for Economic Policy Analysis believed Dutch GDP to decrease by five percent. Three months later, this was adjusted to minus six percent in the base scenario.

The numbers shown are from four possible scenarios that were originally released at the end of March, 2020, all based on how long emergency measures from the Dutch government to counter the coronavirus would be in place. The source back then stated very strongly that these numbers are not official forecasts, but rather estimates of how big the economic impact of the pandemic could potentially be. At the time of its original release, there were too many unknowns to come to a full forecast. In June 2020, the source expressed the same uncertainty, citing "considerable uncertainty about the course of the pandemic and the rate of recovery of the economy". This opinion was also voiced by Dutch bank Rabobank in March 2020, which also attempted a GDP growth outlook with the coronavirus in mind for the Netherlands.

Economic outlook scenarios on the impact of COVID-19 for GDP growth in the Netherlands in 2020 and 2021

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Release date

June 2020

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Region

Netherlands

Survey time period

2020 and 2021

Supplementary notes

The figures have been taken from several publications.

The source used four alternatives scenarios to predict the economic outlook for 2020 and 2021, in the wake of the COVID-19 outbreak. Note that the source emphasizes very strongly that these are not official forecasts, but potential estimates. When these numbers were published at the end of March, 2020, the source (used by the Dutch government for their budget and policy planning) stated there too many unknowns but felt it had to give a certain prediction as circumstances had changed so much since their original outlook earlier that month.

The four scenarios were based on the length of the measures taken by the Dutch government to reduce of physical contact and how this length affects the economy. The scenarios were as follows, and were translated as closely as possibly from the original Dutch source material:

Scenario 1 - Measures are in effect for three months, leading to first economic recovery in 2020. Production capacity stays relatively the same due to successful government support;
Scenario 2 - Measures are in effect for six months, leading to much bigger economic impact. World trade declines;
Scenario 3 - Measures are in effect for six months, but big problems in world economy and the financial market lead to a longer and much deeper recession;
Scenario 4 - Measures are in effect for 12 months, with a situation where a recession would be at least 1.5 years due to problems in the financial sector and in other foreign countries.

The source states that the scenarios "were chosen to illustrate some of the main uncertainties and give an impression of possible economic consequences. There are also other conceivable scenarios. We chose certain assumptions in an attempt to present a somewhat plausible variation, but other assumptions are also possible. The scenarios, therefore, should not be regarded as a lower or upper limit of possible outcomes." Additionally, the source does not pick any of these four scenarios as to being the most likely to happen.

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