Statistics Netherlands (CBS) reported the largest economic growth ever. Nearly 8% in comparison to the previous quarter. But if we compare this with the same quarter last year, we still see a substantial decrease of 2.5%. According to Bas Jacobs, Professor of Public Economics at Erasmus School of Economics, this is still relatively good. Nevertheless, these figures do not allow us to say anything about the next quarter, explains Jacobs on Dutch radio station BNR.
Hopeful insights
The figures of Statistics Netherlands seem optimistic. The Dutch economy is recovering from the hard blows of the coronavirus. And the Netherlands seems to be doing good internationally as well. ‘It seems that the government’s approach, with relatively mild restrictions and good support for companies and employees, has mitigated the economic downturn. We also see that when restrictions are lifted, the economy recovers very quickly. In that sense, I am hopeful about the new figures.’
Uncertainty
However, according to Jacobs, this quarter’s figures say nothing about next quarter's figures. ‘We cannot estimate what the coronavirus is going to do, and therefore we cannot estimate what measures will be taken, or what the effect of those measures will be. These are three major uncertainties that make it very difficult to make statements about the fourth quarter.’
Increasing inequality
The virus has also increased the differences between the countries of northern and southern Europe. The question is, will these differences continue to increase? Or will the recovery fund from Europe be able to absorb the greatest blows? Jacobs thinks that the differences will only increase as a result of the accumulation of problems in the southern European countries. ‘First of all, southern Europe has poorer care systems. During the first wave, we saw a major disaster in Italy. So, we see that if the virus is not under control and the health care system is bad, very strict measures are needed. As a result, these economies will be hit hard by those measures, while they already have weaker economies.’ Furthermore, these countries are in a less generous position with regard to their public finances. All these factors are increasing economic inequalities in Europe.
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Listen to the item of BNR Nieuwsradio, 16 November 2020, here (in Dutch).
